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.
All power and gas contracts registered losses last week, contrasting against the previous week’s bullish fundamentals. Day-ahead gas fell 5.7% to 77.98p/th, finding bearish support across the week following a strong increase to wind generation when compared to the previous seven-day period. However, stronger losses across day-ahead gas were limited by extensive maintenance across the Norwegian and UK Continental Shelves, limiting total flows available to GB. Longer-dated contracts found influence from a reduction in Spot Asian LNG prices, as Chinese demand remains muted due to strong flows of piped gas from Russia and central Asia. Day-ahead power fell 35.8% to £48.46/MWh, following strong wind output, with wind generation contributing to 65% of the generation mix on 31 August, and at the time of writing, 71% of the generation mix on 1 September, supporting the strong losses seen at the day-ahead level on 29 August. Likewise, September 25 gas was down 6.5% at 77.85p/th, and October 25 gas decreased 6.6% to 77.90p/th. All seasonal gas contracts saw losses last week, down by 3.1% on average, with both winter 25 and summer 26 gas decreasing 5.5% and 4.1% respectively, dropping to 84.50p/th and 76.78p/th. Following gas, all seasonal power contracts fell last week by 2.1% on average, with winter 25 and summer 26 falling 3.4% and 2.1% respectively, dropping to £81.85/MWh and £71.50/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 35.8% to £48.46/MWh, amid the expected return of the 615MW Heysham 2-7, and 595MW Torness 1 nuclear reactors, alongside elevated wind generation across the weekend and 1 September.
- September 25 power slipped 4.1% at £74.60/MWh and October 25 power decreased 4.1% to £73.10/MWh.
Annual October contract
- Q425 power moved 3.9% lower to £79.75/MWh.
- The annual October 25 contract lost 2.8% to £76.68/MWh, 5.5% lower than the same time last year (£81.13/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 21.6% to £68.00/MWh, following its baseload counterpart lower.
- Likewise, September 25 peak power declined 4.5% to £79.50/MWh, and October 25 peak power decreased 3.5% to £84.70/MWh.
Annual October contract
- The annual October 25 peak power fell 1.9% to £89.07/MWh.
- This is 16.3% lower than the same time last year (106.35/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined last week, down on average by 2.1%.
- Winter 25 power decreased 3.4% to £81.85/MWh, while summer 26 fell 2.1% to £71.50/MWh.
Seasonal peak power curve
- Similarly, all Seasonal peak power contracts fell last week, down 1.9% on average.
- Winter 25 and summer 26 peak power dropped 2.8% and 1.9% respectively, falling to £97.70/MWh and £73.85/MWh.
Commodity price movements
Oil and coal
- Although slightly up from last week, averaging $67.97/bl, oil prices remained relatively stable.
- At the beginning of the week, oil prices were driven up following a drone attack from Ukraine on Russia’s Kursk nuclear power plant which led to a 50% reduction in output at one of its reactors.
- By midweek, prices fell following warnings from President Trump that “very heavy” sanctions would be placed on Russia if it does not reach a peace deal with Ukraine, placing concerns over increased macroeconomic uncertainty and lower oil demand by extension.
- Looking ahead, Equinor made a new oil and gas discovery in the Norwegian Sea across the week. The Smørbukk Midt find may yield up to 18.9 million barrels of oil equivalent, strengthening the Åsgard field’s role as one of Norway’s most advanced offshore hubs.
- Current market forecasts predicts that crude oil prices could reach the low $60’s over the coming winter period due to US-tariff related demand concerns and increased OPEC+ supply.
Carbon (UK and EU ETS)
- Both UK and EU carbon markets saw influence from bullish market factors at the beginning of the week; however, by the middle-end of the week, prices fell slightly in both markets.
- As a result, EU ETS prices were up 0.8% to average €72.54/t, and UK ETS carbon prices rose 2.0% to average £52.46/t.
- On 25 August, prices were driven up following drone attacks by Ukraine on Russian energy infrastructure. This drove up oil and gas prices, and subsequently pushed up carbon prices due to its correlation with TTF gas market remaining relatively robust.
- In addition, prices saw support from average temperatures and low wind output across the continent, acting to increase demand for carbon-intensive sources of power.
- Toward the end of the week, forecasts of increased wind and solar generation – coupled with lower demand in Germany – acted to reduce residual demand and push demand for carbon intensive sources of power down.
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight