Headlines – UK Wholesale Gas Prices and Wholesale Electricity Prices
Most tracked power and gas contracts fell across the reporting period when looking at the week-on-week values seen. However, looking throughout the week, day-ahead power prices saw notable fluctuations in prices, with prices reaching a high of £192.50/MWh on 11 November, the highest level seen since 21 December 2022. This notable spike was the result of ‘Dunkelflaute’ conditions, as wind outturn levels were well below what was expected for the time of year, with wind making up less than 10% of the generation mix on 12-13 December. This increased reliance on more expensive gas fired generation, making up more than 70% of the generation mix on the affected days. However, despite these gains, day-ahead power prices on 13 December eased due to expectations of greater wind generation on 16 December, leading to the week-on-week losses seen. Similarly, day-ahead gas fell 11.1% to 101.83p/th, remaining much more stable across the week following healthy gas supplies into GB, with 11 LNG cargoes expected to unload in Britian over the next 17 days, and further increases in UKCS and Norwegian gas flows as maintenance works ease. As a result, January 25 gas was down 11.4% at 102.70p/th, and February 25 gas decreased 11.1% to 103.50p/th. Likewise, most seasonal gas contracts declined last week, down by 3.9% on average, with both summer 25 and winter 25 gas dropped 9.0% and 5.9% respectively, subsiding to 98.25p/th and 99.00p/th. This bearish trend extended to its baseload counterpart, with all seasonal power contracts declining last week, down on average by 4.0%, as summer 25 power decreased 7.1% to £76.20/MWh, and winter 25 fell 5.3% to £81.95/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 24.2% to £70.25/MWh due to projections of higher wind generation levels on 16 December, following notable price volatility across the week, with prices reaching a high of £192.50/MWh on 11 December.
- January 25 power slipped 8.3% at £90.30/MWh and February 25 power decreased 8.2% to £90.40/MWh.
Annual October contract
- Q125 power moved 8.9% lower to £87.50/MWh.
- The annual April 25 contract lost 6.1% to £79.08/MWh, 4.6% lower than the same time last year (£82.88/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 25.6% to £105.80/MWh, following its baseload counterpart lower
- January 25 peak power declined 8.3% to £107.30/MWh, and February 25 peak power decreased 7.3% to £106.85/MWh.
Annual October contract
- The annual April 25 peak power fell 4.2% to £82.83/MWh
- This is 3.0% higher than the same time last year (80.40/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts fell last week, down on average by 4.0%.
- Summer 25 power decreased 7.1% to £76.20/MWh, while winter 25 fell 5.3% to £81.95/MWh.
Seasonal peak power curve
- All seasonal peak power contracts declined last week, down 4.1% on average.
- Summer 25 and winter 25 peak power dropped 6.6% and 3.7% respectively, falling to £81.70/MWh and £95.80/MWh.
Commodity price movements
Oil and coal
- Across the week, Brent crude oil observed slightly bullish movements in price, in contrast to the price losses seen in the previous reporting period, averaging 0.2% higher at $72.86/bl.
- Price gains were primarily driven by reports that production at Norway’s Johan Sverdrup oilfield, the largest oilfield in western Europe, had been halted from an onshore power outage.
- Price gains were further supported by escalations in the Russia-Ukraine war, in which Russia launched missiles on Ukrainian power facilities.
- The US Energy Information Administration (EIA) lowered its 2024 and 2025 brent crude oil forecasts to an average of $80.49/bl in 2024 from $80.95 and $73.58/bl from $76.06 in 2025.
- It noted that this follows the ceasefire between Israel and Hezbollah, which has limited supply risks for oil, in addition to weakening global demand for oil.
- Brent crude oil prices are likely to continue to be subject to a period of volatility amid competing market fundamentals and geopolitical tensions.
Carbon (UK and EU ETS)
- Despite stretches of notably reduced wind generation across both the UK and Europe throughout the reporting period, UK and EU ETS carbon prices saw losses stemming from a drop in gas prices, and traders beginning to move to the Dec-25 EUA futures contract throughout the week.
- EU ETS carbon prices fell 2.1% to average €66.72/t, and the UK ETS carbon price experienced stronger losses, falling 8.0% to average £34.48 reaching the lowest level seen since February 2024 at £33.67/t on 13 December.
- The expiry of the December auctions over the Christmas period for the UK ETS happened on 11 December, and the last auction date for the EU ETS happened on 12 December.
- Moreover, UK ETS carbon prices saw stronger losses following greater profit-taking from traders due to lower prices in the latter half of the week as gas prices fell.
- From the start of 2025, the beginning of a new trading year will buoy prices in the short-term, with the effect of this likely affected by weather conditions, and wind generation projections at the time.
Wholesale price snapshot – Friday-on Friday
