Headlines – UK Wholesale Gas Prices and Wholesale Electricity Prices
Wholesale gas and power contracts saw upwards price movements throughout the week in GB, with lower European gas storage levels when compared to the previous two years, and forecasts of reduced renewable generation on the system for the 20 January, resulting in power and gas contracts rising on the 17 January. Day-ahead gas rose 7.2% to 123.35p/th, recording gains across the week due to the US sanction package on Russia potentially reducing LNG imports into Europe, alongside an unplanned outage at the Norwegian Njord gas field on 15 January. Experiencing a much larger increase, day-ahead power rose 73.8% to £159.07/MWh, with forecasts of lower wind outturn this week tightening system margins, in tandem with an outage at the Heysham 2-8 Reactor. Likewise, February 25 gas was up 5.0% to 119.75p/th, and March 25 gas increased 4.8% to 118.25p/th. Moreover, all seasonal gas contracts rose last week, up by 3.7% on average, with both summer 25 and winter 25 gas growing 4.7% and 4.5% respectively, reaching 116.70p/th and 117.30p/th. All seasonal baseload power contracts registered gains last week too, up on average by 2.1%, as summer 25 power rose 1.8% to £86.00/MWh, and winter 25 grew 3.1% to £92.75/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power rose 73.8% to £159.07/MWh, following projections of notably decreased wind generation for 20 January, and an unplanned outage at the Heysham 2-8 reactor
- Likewise, February 25 power rose 4.0% to £96.70/MWh, and March 25 power increased 3.1% to £92.80/MWh.
Annual October contract
- Q225 power moved 2.7% higher to £86.80/MWh.
- The annual April 25 contract rose 2.4% to £89.38/MWh, 19.0% higher than the same time last year (£75.13/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 27.8% to £150.50/MWh, following its baseload counterpart higher.
- February 25 peak power gained 3.3% at £113.60/MWh, and March 25 peak power increased 3.5% to £100.70/MWh.
Annual October contract
- The annual April 25 peak power rose 3.0% to £91.53/MWh.
- This is 19.6% higher than the same time last year (76.50/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts rose last week, up on average by 2.1%.
- Summer 25 and winter 25 expanded 1.8% and 3.1% respectively, rising to £86.00/MWh and £92.75/MWh.
Seasonal peak power curve
- All Seasonal peak power contracts boosted last week, up 3.0% on average.
- Summer 25 and winter 25 peak power increased 1.9% and 3.8% respectively, rising to £90.95/MWh and £106.40/MWh.
Commodity price movements
Oil and coal
- Continuing its recent upward trend, Brent crude oil rose 4.7% week-on-week to average $80.89/bl, reaching the highest level seen since July 2024 at $81.38/bl, driven by concerns surrounding supply levels following sanctions on Russian oil set in place by the US. Current sanctions are impacting supply across Europe, China, and India, key importing regions
- However, stronger increases across Brent Crude were limited as the risk factor associated with the Red Sea is set to fall. Following a ceasefire deal in Gaza, it is anticipated that there will be a halt in attacks on the Red Sea, allowing ships to travel through
- Brent Crude may experience further gains in the week ahead as expectations of an Arctic blast across the US may impact productions operations across the country, limiting the available amount to be exported
- Data also showed inflation easing in the U.S, raising expectations surrounding potential interest-rate cuts, thereby increasing overall demand for oil
Carbon (UK and EU ETS)
- Similar to the movements observed across the week previous, UK ETS and EU ETS carbon prices observed opposing movements, highlighting the difference in prices across the associated scheme.
- UK ETS carbon continued to move downwards across the reporting period, falling 3.7% to average £33.44/t, starting the week at £35.07/t before registering daily losses. This was due to reduced demand, higher wind generation across the week, and mild weather conditions, resulting in the lowest level seen since the schemes inception in 2021, at £31.89/t on 17 January
- EU ETS carbon, however, saw continued gains as the week progressed, rising 5.6% to average €78.01/t, starting at €76.87/t and ending at €79.71/t, the highest level seen since December 2023 due to a sustained cold-snap across central Europe, and reduced renewable penetration on the system due to low wind and solar generation
- As the months warm up, it can be expected that carbon prices will fall, as lower heating demand reduces power demand in turn
Wholesale price snapshot – Friday-on Friday
