Headlines – UK Wholesale Gas and Electricity Prices
Latest news on UK wholesale energy market trends, with weekly, monthly, and yearly price updates on gas and electricity (day-ahead and year-ahead), coal, EUA carbon, UKA carbon, and Brent crude oil, plus key cost movements.
Due to the strong levels of wind outturn seen over the reporting period, coupled with milder weather and robust LNG send-out, a bearish trend was observed across tracked power and gas contracts. Day-ahead gas fell 13.1% to 89.50p/th, following a combination of milder weather forecasts and steady wind generation, easing system supply margins. Prices were also pushed lower by stronger Norwegian nominations and higher LNG send-out, particularly from South Hook, on 2 February. Day-ahead power fell 12.6% to £87.4/MWh, with losses at the day-ahead level supported by periods of higher wind generation across the week, acting to limit stronger levels of gas-fired generation on the system. Wind generation peaked at 48.0% of the generation mix on 5 February, followed by 41.2% on 6 February. March 26 gas was down 12.2% at 83.45p/th, and April 26 gas decreased 6.4% to 78.90p/th. All seasonal gas contracts declined last week, down by 3.5% on average, as both summer 26 and winter 26 gas dropped 4.5% and 2.8% respectively, subsiding to 75.13p/th and 78.55p/th. All seasonal power contracts declined last week, down on average by 4.7%, as summer 26 power decreased 5.1% to £72.85/MWh, while winter 26 fell 4.0% to £78.50/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 12.6% to £87.40/MWh, following strong levels of wind outturn, easing system margin.
- March 26 power slipped 9.5% to £84.00/MWh and April 26 power decreased 5.9% to £76.00/MWh.
Annual October contract
- Q226 power moved 5.3% lower to £73.15/MWh.
- The annual April 26 contract lost 4.5% to £75.68/MWh, 10.7% lower than the same time last year (£84.75/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 6.3% to £105.00/MWh, following its baseload counterpart.
- March 26 peak power declined 9.5% to £90.00/MWh, and April 26 peak power decreased 4.2% to £78.00/MWh.
Annual October contract
- The annual April 26 peak power contract rose 5.6% to £76.93/MWh.
- This is 11.8% lower than the same time last year (£87.25/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined last week, down on average by 4.7%.
- Summer 26 power decreased 5.1% to £72.85/MWh, while winter 26 power fell 4.0% to £78.50/MWh.
Seasonal peak power curve
- All seasonal peak power contracts declined last week, down 5.8% on average.
- Summer 26 and winter 26 peak power dropped 6.4% and 3.9% respectively, falling to £73.45/MWh and £93.00/MWh.
Commodity price movements
Oil and coal
- Brent crude oil broke its recent upward trend, easing 1.5% to average $67.26/t.
- Across the week, renewed diplomatic talks between the U.S. and Iran eased fears of potential supply disruptions in the Middle East, reducing risk premiums and shifting the market view towards improving supply expectations.
- Moreover, Trump announced that approximately 50 million barrels of Venezuelan oil were en route to the U.S., and that Washington and Venezuela’s leadership are “getting along very well”.
- However, despite the increased diplomatic efforts, uncertainty surrounding the outcome of U.S.-Iran negotiations limits stronger price losses to the market, with Iran’s location near the Strait of Hormuz remaining a structural risk premium in the market.
- Similarly, on the supply side, U.S. crude inventories saw strong declines, falling by 11.1 million barrels across the week ending 4 February due to disruptions to production following cold weather conditions across the country.
Carbon (UK and EU ETS)
- EU and UK ETS carbon continued their bearish trends with EU ETS carbon decreasing 4.7% to €81.28/t and UK ETS carbon dropping 7.6% to £60.44/t.
- Across the week, lower prices were supported by strengthened renewable output, alongside a lower residual load across continental Europe, reducing the reliance on more carbon intensive forms of fossil-fuel generation while softening support for marginal power-sector emissions.
- Moreover, Dutch TTF saw losses amid mild weather forecasts, and due to no immediate supply disruptions, and expected temperature increases, the market remains under downward pressure.
- However, stronger losses were limited as EUAs approached levels where compliance‑driven purchasing becomes more visible, while further forced selling dropped following recent reductions in market positions.
- The shift increased the level of balanced trading, limiting stronger losses in the market.
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight