Headlines – UK Wholesale Gas Prices and Wholesale Electricity Prices
Despite strong price volatility in the power market last week, reaching a weekly peak of £172.86/MWh on 9 January, both gas and power markets registered losses. Day-ahead gas fell 7.4% to 115.05p/th, following strong levels of LNG deliveries, limiting supply concerns amid a period of high demand and low wind generation. Likewise, day-ahead power fell 15.3% to £91.5/MWh, despite the strong bullish impact of an extended period of below-average temperatures boosting domestic gas-for-heating demand, paired with low levels of wind generation across the week, resulting in NESO issuing an Electricity Margin Notice for 9 January. However, wind generation forecasts recovered on 10 January, weighing bearishly on price, motivating the week-on-week decrease. February 25 gas was down 8.0% at 114.00p/th, and March 25 gas decreased 7.6% to 112.85p/th. All seasonal gas contracts declined last week, down by 2.5% on average, while both summer 25 and winter 25 gas dropped 6.1% and 3.4% respectively, subsiding to 111.45p/th and 112.30p/th. All seasonal power contracts declined this week, down on average by 4.4%, as summer 25 power decreased 7.1% to £84.50/MWh, while winter 25 fell 4.1% to £90.00/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 15.3% to £91.5/MWh, despite strong price volatility across the week, prices fell due to secure margins and strong wind generation forecasts on 10 January.
- February 25 power slipped 10.4% at £93/MWh and March 25 power decreased 8.9% to £90/MWh.
Annual October contract
- Q225 power moved 7.8% lower to £84.5/MWh.
- The annual April 25 contract lost 5.5% to £87.25/MWh, 10.8% higher than the same time last year (£78.75/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 2.1% to £117.75/MWh, opposing its baseload counterpart.
- February 25 peak power declined 9.1% at £110/MWh, and March 25 peak power decreased 9.5% to £97.25/MWh.
Annual October contract
- The annual April 25 peak power rose 5.9% to £88.83/MWh
- This is 16.9% higher than the same time last year (76/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined this week, down on average by 4.4%.
- Summer 25 power decreased 7.1% to £84.50/MWh, while winter 25 fell 4.1% to £90.00/MWh.
Seasonal peak power curve
- All Seasonal peak power contracts declined this week, down 6.0% on average.
- Summer 25 and winter 25 peak power dropped 8.4% and 4.1% respectively, falling to £89.25/MWh and £102.50/MWh.
Commodity price movements
Oil and coal
- Last week Brent crude oil observed bullish movements in price, averaging 2.3% higher at $77.27/bl.
- Brent crude prices rose on expectations that new US sanctions on Russian supply will lead to a tighter market. As a result, prices reached the highest level seen since October 2024, at $78.59/bl on 10 January.
- The US sanctions on Russian exports are also set to impact China and India, both major buyers. It is anticipated that China and India will turn to purchasing their crude oil from the Middle East, Africa, and the US, increasing prices and shipping costs.
- However, stronger gains across the commodity were limited by weaker-than-anticipated economic growth from China, one of the largest crude oil importers, impacting global demand levels.
- Goldman Sachs is currently anticipating that Brent crude will trade between the prices of $70.00/bl and $85.00/bl, and average $76.00/bl across 2025. OPEC+ currently has high spare capacity, expected to provide a buffer to supply concerns from geopolitical events.
Carbon (UK and EU ETS)
- UK and EU ETS carbon prices saw diverging price movements last week. EU ETS carbon prices rose 0.6% to average €73.85/t, with UK ETS carbon falling 3.5% to average £34.74/t.
- Gains across the EU ETS carbon price were driven by reduced wind generation across the continent, alongside lower coal prices, motivating higher rates of coal-fired generation.
- Additionally, the beginning of the new trading year for the EUA auctions on 7 January buoyed prices throughout the week.
- UK ETS carbon prices found a bearish influence across the reporting period, tracking the losses seen across NBP gas, which it remains strongly linked with.
- The UK ETS carbon price is anticipated to be supported by the reduced UK ETS auction allowances, limiting the number of allowances from 2,757,000 to 2,239,000.
- Carbon prices will continue to be driven by wind generation and temperatures across the UK and Europe as renewable capacity grows.
Wholesale price snapshot – Friday-on Friday
