Headlines – UK Wholesale Gas Prices and Wholesale Electricity Prices
Both power and gas markets saw overall bearish movements last week, however there was strong volatility during the week in the power market. Day-ahead gas fell 1.5% to 114.60p/th, following warmer weather conditions in the latter half of the week easing domestic heating demand, paired with healthy levels of supply from both LNG flows into GB terminals and from UKCS and Norwegian flows with the easing of maintenance works. Likewise, day-ahead power fell 2.6% to £92.68/MWh, but prices reached their highest since November 2023 on 3 December at £122.25/MWh due to low rates of available wind generation, coupled with reduced UK nuclear availability and colder temperatures tightening gas margins, feeding into electricity prices. Conversely, on December 6 electricity prices dropped to £92.68/MWh as wind generation increased and the 630MW Sizewell B nuclear reactor returned from maintenance, bringing total GB nuclear capacity to 63%, easing system margins. Moreover, January 25 gas was down 3.4% at 115.85p/th, and February 25 gas decreased 3.0% to 116.40p/th. All seasonal gas contracts declined last week, down by 1.6% on average, while both summer 25 and winter 25 gas dropped 3.0% and 3.3% respectively, subsiding to 108.00p/th and 105.25p/th. All seasonal power contracts registered losses last week, down on average by 2.4%, as summer 25 power decreased 2.4% to £82.00/MWh, while winter 25 fell 2.3% to £86.50/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 2.6% to £92.68/MWh, following increased rates of wind generation and rising nuclear capacity in the latter half of the week, easing system margins.
- January 25 power slipped 2.7% to £98.50/MWh and February 25 power decreased 3.0% to £98.50/MWh.
Annual October contract
- Q125 power moved 3.3% lower to £96.00/MWh.
- The annual April 25 contract lost 2.3% to £84.25/MWh, 5.3% lower than the same time last year (£89.00/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 36.5% to £142.25/MWh, opposing its baseload counterpart.
- January 25 peak power declined 2.5% to £117.00/MWh, and February 25 peak power decreased 3.7% to £115.25/MWh.
Annual October contract
- The annual April 25 peak power contract fell 1.9% to £86.50/MWh
- This is 4.2% lower than the same time last year (£90.25/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined last week, down on average by 2.4%.
- Summer 25 power decreased 2.4% to £82.00/MWh, while winter 25 fell 2.3% to £86.50/MWh.
Seasonal peak power curve
- Likewise, all seasonal peak power contracts declined last week, down 1.9% on average.
- Summer 25 and winter 25 peak power dropped 1.1% and 2.0% respectively, falling to £87.50/MWh and £99.50/MWh.
Commodity price movements
Oil and coal
- Last week Brent crude oil maintained its downward price movements, falling 0.7% to average $72.68/bl.
- Bearish movements were primarily driven by OPEC+ postponing planned supply increases and extending output cuts until the end of 2026, raising concerns over weak demand for the commodity.
- However, price losses were limited due to supply concerns resulting from Israel threatening to attack Lebanon if its truce with Hezbollah collapses.
- Additionally, weak Chinese oil demand is expected to continue to provide a bearish influence on oil prices, with the IEA noting that Chinese demand is expected to peak as soon as next year due to transport fuel demand declining over the increasing adoption of electric vehicles.
- Looking ahead, Brent crude oil prices continue to be subject to a period of volatility, with price changes largely being influenced by the conflict in the Middle-East, the Russia-Ukraine war, Donald Trump’s victory at the US election, as well as concerns around China’s oil demand.
Carbon (UK and EU ETS)
- Last week saw a mixed trend across the carbon markets, as large fluctuations in the level of wind generation on the system impacted the amount of fossil-fuelled power generation needed to meet demand.
- Subsequently, EU ETS carbon prices fell 0.8% to €68.17/t, while UK ETS carbon prices rose 2.0% to £37.49/t.
- Periods of lower temperatures in the UK at the start of the week acted to increase heating demand, providing support to the upwards adjustment seen.
- Moreover, prices were mixed despite the upcoming expiry of the December auctions over the Christmas period – running from 11 December 2024 to 8 January 2025 for the UK ETS, and the last auction date for the EU ETS happening on 12 December – highlighting the difference in demand domestically and across the continent.
- Looking ahead, the beginning of a new trade year in January may lead to short-term price increases, but the extent of this growth will be determined by weather conditions during that period.
Wholesale price snapshot – Friday-on Friday
