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.
Most power and gas contracts were mixed last week, with a fall in most power contracts due to increased wind generation, leading to a rise in supply to meet increased demand. Day-ahead power saw strong losses, compared to minor gains in longer term contracts. Day-ahead gas rose 4.5% to 79.30p/th, following increased demand for domestic heating, tightening gas supply margins, weighing bullishly on prices. Conversely, day-ahead power saw strong losses of 20.9% to £69.44/MWh, with demand met by wind generation, generating 53.3% of the generation mix on 12 November. December 25 gas was up 1.0% at 81.80p/th, and January 26 gas remained stable week-on-week at 82.73p/th. Most seasonal gas contracts declined last week, down by 1.2% on average, while both Summer 26 and Winter 26 gas dropped 1.0% and 1.3% respectively, subsiding to 74.38p/th and 81.58p/th. All seasonal power contracts boosted last week, up on average by 0.3%, as summer 26 and winter 26 expanded 0.2% and 0.4% respectively, rising to £70.58/MWh and £79.60/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 20.9% to £69.44/MWh, following an increase in domestic wind generation, which was used to meet increasing demand week-on-week.
- December 25 power climbed 2.1% at £82.55/MWh and January 26 power decreased 0.7% to £87.50/MWh.
Annual October contract
- Q126 power moved 0.6% higher to £84.50/MWh.
- The annual April 26 contract rose 0.3% to £75.09/MWh, 3.0% higher than the same time last year (£72.90/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 10.9% to £104.70/MWh, following increased domestic power demand, due to a fall in temperatures across GB driving demand for domestic heating.
- December 25 peak power gained 1.2% at £102.00/MWh, and January 26 peak power increased 1.0% to £107.78/MWh.
Annual October contract
- The annual April 26 peak power rose 1.7% to £78.91/MWh.
- This is 6.20% higher than the same time last year (74.30/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts boosted last week, up on average by 0.3%.
- Summer 26 and Winter 26 expanded 0.2% and 0.4% respectively, rising to £70.58/MWh and £79.60/MWh.
Seasonal peak power curve
- All seasonal peak power contracts boosted last week, up 1.8% on average.
- Summer 26 and Winter 26 peak power increased 2.5% and 0.7% respectively, rising to £73.00/MWh and £95.05/MWh.
Commodity price movements
Oil and coal
- The average price of Brent crude decreased week-on-week, down 0.3%, reaching a peak of $65.11/bl on 11 November, with a trough of $63.15/bl on 13 November.
- Crude oil traded bearishly amid persistent oversupply pressures and weaker global demand, because of higher OPEC outputs.
- It was reported that OPEC crude oil production grew by 33,000 bpd in October, when compared to the month previous, whilst OPEC+ production fell 73,000bpd across the same period.
- US commercial crude inventories increased by 1.3mn barrels in the reporting period resulting in weak demand signals.
- Brent crude oil prices saw bullish pressure in the latter end of the week, due to supply fears as the Russian Black Sea port of Novorossiisk halted oil exports, following a Ukrainian drone attack that hit an oil depot in a major Russian energy hub.
Carbon (UK and EU ETS)
- As temperatures across the UK fell through the week, higher fuelled demand resulted in an increased demand for UK Carbon credits, pushing up prices across the UK ETS by 0.4% week-on-week. EU prices weighed slightly bullishly, falling by less than 0.1%, due to temperatures remaining mild, above season average.
- On 13 November members of the European Parliament approve plans to reduce 2040 greenhouse gas emissions targets. The previous goal of reducing emissions by 90% by 2040 has now been broken down to allow countries to reduce emissions by 85% and outsource the remaining 5% abroad by purchasing international carbon offsets.
- Also, the UK government is set to begin negotiations in the coming week to link the UK and EU’s carbon trading regime, with the intentions to allow companies to avoid a tax on high-emissions produces the EU is planning to introduce, which will increase short-term UK ETS prices as prices look to reach those of their European counterpart.
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight