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.
Power and gas contracts saw mixed trends last week, although both markets experienced bullish pressure as a result of cooler temperatures supporting increased system demand, with power contracts seeing gains as wind outputs registered losses week-on-week. Day-ahead gas fell 0.6% to 78.80p/th, despite increased gas demand for domestic heating, bearish trends were supported by forecasted temperature increases the following week. Conversely, day-ahead power rose 23.8% to £86.00/MWh, due to more expensive gas-fired generation frequently being utilised to meet elevated demand throughout the reporting period. December 25 gas was down 3.9% at 78.65p/th, and January 26 gas decreased 3.4% to 79.88p/th. Front-month baseload contracts, saw gains on December 25 contracts, but losses for January 26, whilst peak power saw losses for both December 25 and January 26 contracts. Moreover, back-month contracts for baseload and peak power are registering losses through until summer 27. All seasonal gas contracts declined last week, down by 4.3% on average, while both summer 26 and winter 26 gas dropped 4.2% and 4.5% respectively, subsiding to 71.28p/th and 77.90p/th. Most seasonal power contracts registered losses last week, down on average by 2.3%, as summer 26 power decreased 1.4% to £69.60/MWh, while winter 26 fell 2.6% to £77.55/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power rose 23.8% to £86.00/MWh, following a decrease in wind outputs coupled with periods of high demand.
- December 25 power slipped 1.0% at £81.75/MWh and January 26 power increased 0.6% to £88.00/MWh.
Annual October contract
- Q126 power moved 1.8% lower to £83.00/MWh.
- The annual April 26 contract lost 2.0% to £73.58/MWh, 1.3% higher than the same time last year (£72.63/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 0.2% to £104.50/MWh, opposing the bullish trend in its baseload counterpart.
- December 25 peak power declined 1.1% at £100.88/MWh, and January 26 peak power decreased 1.0% to £106.65/MWh.
Annual October contract
- The annual April 26 peak power rose 2.3% to £77.10/MWh.
- This is 3.14% higher than the same time last year (74.75/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts declined last week, down on average by 2.3%.
- Summer 26 power decreased 1.4% to £69.60/MWh, while winter 26 fell 2.6% to £77.55/MWh.
Seasonal peak power curve
- All seasonal peak power contracts declined last week, down 2.4% on average.
- Summer 26 and winter 26 peak power dropped 2.4% and 1.7% respectively, falling to £71.25/MWh and £93.45/MWh.
Commodity price movements
Oil and coal
- The average price of Brent crude decreased week-on-week, down 0.6%, reaching a peak of $64.20/bl on 17 November, and with a trough of $61.99/bl on 21 November.
- Last week, Russia’s Novorossiysk port on the Black Sea resumed crude loadings, after Ukrainian attacks halted production for two days – applying bearish pressure to prices as disruptions concluded.
- The continued diplomatic efforts by the United States to push for a Russia-Ukraine peace deal, are contributing to increased market volatility, driving down prices as the deal is expected to swell global supply.
- It was reported that US sanctions on Rosneft and Lukoil, which took effect on 21 November, would have typically caused friction and applied bullish pressure to Crude oil prices, but the markets focus on the Russia-Ukraine peace deal has limited upside.
Carbon (UK and EU ETS)
- EU ETS saw a 0.5% decrease last week, falling to an average of €80.64/t last week, whilst UK ETS saw minor 0.1%, with a weekly average price of £57.41/t.
- Temperatures across Europe are expected to increase from the recent cold spell to seasonally higher than average temperatures, reducing heating demand and reducing demand for both EU and UK ETS carbon credits.
- The fall in demand has been reflected in bearishly trending prices throughout Europe, with a flat to bullish trend within the UK trading scheme due to a slight increase in generation demand through a cold, calm weather spell.
- The European Union is exploring ways to reduce the cost of the new Carbon Border Adjustment Mechanism (CBAM) on UK electricity exporters, following fears that British electricity exports to Ireland and Europe could be penalised more heavily than intended.
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight