Headlines
Day-ahead gas fell 2.5% to 79.50p/th, with periods of reduced wind generation across the week acted to increase the reliance on gas-fired generation to meet demand, in turn leading to higher day-ahead prices. However, day-ahead gas prices on 16 August found their strong bearish movements rooted in high renewable generation forecasts for 19 August, acting to limit total gas-for-power demand. Conversely, day-ahead power rose 28.9% to £70.37/MWh, finding support from periods of reduced wind generation as the week progressed. Despite high wind generation forecasts for 19 August, day-ahead contracts on 16 August experienced gains when compared to the prices seen in the week previous. September 24 gas was down 3.0% at 95.20p/th, and October 24 gas decreased 1.9% to 99.90p/th. Mixed movements were seen across seasonal gas contracts last week, up by 0.7% on average, while winter 24 gas dropped 0.3% to 110.90p/th, while summer 25 gas increased 1.3% to 104.30p/th. Most seasonal power contracts boosted this week, up on average by 1.2%, as winter 24 and summer 25 expanded 1.5% and 1.0% respectively, rising to £95.45/MWh and £82.85/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power rose 28.9% to £70.37/MWh, following periods of reduced wind generation during the reporting week.
- September 24 power slipped 0.4% at £80.7/MWh and October 24 power decreased 1.1% to £81.85/MWh.
Annual October contract
- Q424 power moved 0.9% higher to £92.05/MWh.
- The annual October 24 contract rose 1.3% to £89.15/MWh, 22.3% lower than the same time last year (£114.75/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 18.0% to £58.25/MWh, following its baseload counterpart.
- September 24 peak power declined 0.2% at £86.8/MWh, and October 24 peak power increased 6.8% to £88.4/MWh.
Annual October contract
- The annual October 24 peak power rose 8.3% to £102.03/MWh.
- This is 35.8% lower than the same time last year (159/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts boosted this week, up on average by 1.2%.
- Winter 24 and summer 25 expanded 1.5% and 1.0% respectively, rising to £95.45/MWh and £82.85/MWh.
Seasonal peak power curve
- All Seasonal peak power contracts boosted this week, up 8.8% on average.
- Winter 24 and summer 25 peak power increased 1.3% and 8.2% respectively, falling to £109.90/MWh and £88.70/MWh.
Commodity price movements
Oil and coal
- Brent crude oil saw bullish movements across the previous week
- This followed the release of data from the US outlining that retails sales rose more than anticipated across July, offsetting concerns surrounding a recession across the country
- Moreover, the geopolitical concerns continue to provide an upside to Brent crude prices, with the threat of retaliation from Iran providing a bullish market sentiment. Similarly, the Russian-Ukraine conflict kept prices elevated across the weekHowever, stronger gains were limited by a rise in US crude oil stockpiles, up 2.2 million barrels a week in the week ending 9 August, in tandem with reduced factory output from China and continued refinery output drops, outlining China’s economic recovery is still below expected levels
Carbon (UK and EU ETS)
- Both UK and EU carbon prices saw gains across the week, with European carbon prices finding support from the market volatility arising due to periods of higher gas prices, and decreased trading activity due to the public holiday, Assumption Day, occurring across much of Europe
- Stronger gains across EU carbon prices were limited by higher coal prices, reducing the economic incentive to generate using coal-fired generation, and limiting total EUA demand as a result. Moreover, prices on 16 August found bearish influence from the reduced auction schedule in the week ahead, with no biweekly Polish auction occurring
- Much like EU carbon prices, UK carbon prices found bullish influence from periods of higher gas prices, reaching a monthly high of £40.42/t on 15 August, in tandem with periods of low wind generation on the system bolstering demand for more carbon intensive forms of power generation
Wholesale price snapshot – Friday-on Friday
