Headlines – UK Wholesale Gas Prices and Wholesale Electricity Prices
Most near-term contracts saw bullish movement last week. Day-ahead gas rose 1.1% to 124.75p/th, following periods of reduced gas flows from the Norwegian Continental Shelf due to an extension of the outage at the Karso gas production facility and continuing maintenance at Gullfaks. Likewise, February 25 gas was up 4.3% at 124.93p/th, and March 25 gas increased 4.3% to 123.38p/th. Day-ahead power avoided this overall bullish trend however, due to strong fluctuations in supply fundamentals, falling 44.7% to £88.00/MWh, after strong bullish conditions at the weeks beginning. Low wind generation and the continuation of an unplanned outage at the Heysham 2-8 reactor reduced available supply, tightening system margins, with prices reaching a weekly peak of £280.02/MWh on 21 January, the highest day-ahead power price since December 2022. Following on from that, once wind generation subsequently increased and system margins eased, a strong bearish movement was seen across the latter half of the week. Moreover, most seasonal gas contracts declined last week, down by 0.5% on average, as winter 25 gas dropped 1.3% to 115.83p/th. However, summer 25 gas was the exception to this bearish trend, increasing 4.6% to 122.05p/th. Most seasonal power contracts boosted last week, up on average by 1.9%, as summer 25 and winter 25 expanded 7.3% and 0.7% respectively, rising to £92.30/MWh and £93.40/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 44.7% to £88.00/MWh, following strong volatility across the week in wind generation, ending the week with a strong bearish impact on price.
- February 25 power climbed 9.9% at £106.30/MWh and March 25 power increased 5.9% to £98.30/MWh.
Annual October contract
- Q225 power moved 6.7% higher to £92.65/MWh.
- The annual April 25 contract rose 3.9% to £92.85/MWh, 25.5% higher than the same time last year (£74.00/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 8.7% to £137.40/MWh, following its baseload counterpart.
- February 25 peak power gained 8.9% at £123.75/MWh, and March 25 peak power increased 5.6% to £106.30/MWh.
Annual October contract
- The annual April 25 peak power rose 2.9% to £94.20/MWh.
- This is 28.2% higher than the same time last year (73.5/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts boosted last week, up on average by 1.9%.
- Summer 25 and winter 25 expanded 7.3% and 0.7% respectively, rising to £92.30/MWh and £93.40/MWh.
Seasonal peak power curve
- Most seasonal peak power contracts boosted last week, up 2.8% on average.
- Summer 25 and winter 25 peak power increased 8.2% and 0.9% respectively, rising to £98.40/MWh and £107.40/MWh.
Commodity price movements
Oil and coal
- Brent crude oil fell 2.2% week-on-week to average $79.15/bl, primarily due to President Trump’s address at the World Economic Forum, in which he called for lower oil prices and outlined that OPEC countries should increase supply to achieve that, leading to higher global supply.
- However, stronger losses were limited as Trump also outlined economic sanctions against Columbia, raising market concern over potential oil supply disruptions due to Columbia’s high levels of oil exports.
- Moreover, optimism surrounding Chinese economic growth aided further bullish sentiment to the market, as investors returned for the first trading day of 2025 on 23 January, with expectations of higher growth feeding growing oil demand in China.
- It’s expected that crude prices will continue to oscillate into the future as they are reliant on sensitive geopolitical issues including the war in the Middle East, Chinese demand, and US inflation and production – all of which are changing on a day-by-day basis.
Carbon (UK and EU ETS)
- UK ETS carbon continued to move downwards across the week, falling 0.1% to average £33.40/t. EU ETS carbon saw continued gains as the week progressed, rising 2.9% to average €80.28/t.
- Prices across the EU ETS found support from higher Dutch TTF prices, which it remains coupled to, and periods of lower wind generation, ending the week at €81.66/t, the highest level seen since October 2023.
- EU carbon prices breaching €80.00/t will act to raise discussions in the market with regards to the increasing speculative length.
- However, stronger gains were limited by higher coal prices, acting to decrease coal-fired generation, a typically more carbon intensive form of power generation across Europe.
- Carbon prices are expected to fall as the months warm up further into the year. Likewise, increases to European LNG regasification capacity and mild weather expectations are set to decrease the reliance on coal burning across Europe into 2025.
Wholesale price snapshot – Friday-on Friday
