Headlines
Almost all power and gas contracts fell last week, with the only exception being day-ahead power, which rose 9.2% to £106.50/MWh due to below average levels of wind generation, increasing reliance on more expensive gas-fired assets. This resulted in day-ahead power reaching the highest level seen since 5 December at £107.66/MWh on 29 October. Conversely, day-ahead gas fell 11.3% to 96.25p/th, following milder temperatures across the week, reducing gas-heating demand. Additionally, temperatures are forecast to remain above-average in the coming week, further suppressing domestic heating demand. Likewise, December 24 gas was down 11.5% at 98.70p/th, and January 25 gas decreased 10.3% to 100.45p/th. All seasonal gas contracts declined last week, down by 6.1% on average, while both summer 25 and winter 25 gas dropped 8.2% and 9.1% respectively, subsiding to 92.75p/th and 96.95p/th. All seasonal power contracts also registered losses last week, falling on average by 5.5%, as summer 25 power decreased 7.0% to £73.00/MWh, while winter 25 fell 6.5% to £81.60/MWh.
Baseload electricity
Forward curve comparison
- Day-ahead power rose 9.2% to £106.50/MWh, following lower wind generation in the week.
- December 24 power reduced 8.9% to £83.40/MWh and January 25 power decreased 8.8% to £89.60/MWh.
Annual October contract
- Q125 power moved 8.1% lower to £88.00/MWh.
- The annual April 25 contract lost 6.7% to £77.30/MWh, 21.7% lower than the same time last year (£98.75/MWh).
Peak electricity
Forward curve comparison
- Day-ahead peak power was down 1.5% to £115.00/MWh, opposing its baseload counterpart.
- December 24 peak power declined 5.5% to £100.90/MWh, and January 25 peak power decreased 7.0% to £108.60/MWh.
Annual October contract
- Annual April 25 peak power rose 5.0% to £81.35/MWh.
- This is 16.1% lower than the same time last year (£97.00/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts saw losses last week, down on average by 5.5%.
- Summer 25 power decreased 7.0% to £73.00/MWh, while winter 25 fell 6.5% to £81.60/MWh.
Seasonal peak power curve
- All seasonal peak power contracts declined last week, down 5.0% on average.
- Summer 25 and winter 25 peak power dropped 5.7% and 5.4% respectively, falling to £79.00/MWh and £95.30/MWh.
Commodity price movements
Oil and coal
- Brent crude oil registered bearish movements last week, in contrast to the bullish movements observed the week previous, highlighting the ongoing volatility amid competing market fundamentals.
- At the beginning of the week, strong price losses were seen due to a de-escalation in the Middle East conflict, with Israel’s limited reaction to Iran’s missile attack over the weekend convincing the market that an escalation in the conflict was unlikely.
- However, at the end of the week, price gains were registered due to Iran announcing that they would respond to Israel’s attacks earlier in the week, with a re-escalation in the conflict deemed likely. Additionally, reports that OPEC+ could delay planned increases in oil production in December added to this bullish movement.
- The upcoming US election could also provide significant movements to upcoming brent crude oil prices, with concerns around the Middle East conflict and Chinese demand also contributing to oil’s continued period of volatility.
Carbon (UK and EU ETS)
- Last week represented a mixed period for both ETS schemes, with the EU ETS carbon price rising to €65.51/t, whereas the UK ETS carbon price dropped to £38.27/t.
- In the UK prices saw losses due to above-average. temperatures across the country, limiting overall demand for heating generation, in turn limiting total UKA demand.
- Also, announced as a part of the Autumn Budget 2024 the Government published its response to its March 2024 consultation on the introduction of a UK carbon border adjustment mechanism (CBAM) from January 2027. In the response document, the Government confirms that a UK CBAM will be introduced on 1 January 2027, placing a carbon price on emissions intensive goods imported to the UK from the aluminum, cement, fertiliser, hydrogen, and iron and steel sectors.
- Across the week ahead, prices are anticipated to decrease, due to reduced domestic gas-for-heating requirements stemming from above-average temperatures and increased wind generation levels.
Wholesale price snapshot – Friday-on Friday
