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.
Day-ahead gas fell 7.6% to 117.00p/th, following strong fluctuations across the week, rising to 130.10p/th on 19 May, the highest level seen since the end of March, before ending the week at a three-week low of 117.00p/th on 22 May. The two-month price high earlier in the week was the result of disruptions to major LNG production facilities including Freeport in the US, and strike action across Australian LNG terminals. Similarly, concerns of renewed military action in the Middle East at the start of the week kept the risk premium heightened. Day-ahead power fell 8.4% to £106.3/MWh, amid a strong rise in solar generation, linked to heatwave conditions. Additionally, wind generation remained stable across the reporting period, further easing system margins. On 25 May, GB recorded its lowest transmission demand at 12.6GW between 13:00-13:30, with high solar outturn and low bank holiday demand all contributing to the record low. June 26 gas was down 5.5% at 117.13p/th, and July 26 gas decreased 5.2% at 116.55p/th. Most seasonal gas contracts declined last week, down by 2.0% on average, while both winter 26 and summer 27 gas dropped 3.1% and 2.7% respectively, subsiding to 119.43p/th and 85.65p/th. Most seasonal power contracts rose last week, up on average by 0.5%, as winter 26 power expanded 0.9% to £101.70/MWh, while summer 27 fell 0.9% to £74.80/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 8.4% to £106.30/MWh, following strong solar and wind outturn over the week.
- June 26 power slipped 2.7% at £100.20/MWh and July 26 power decreased 1.7% to £100.00/MWh.
Annual October contract
- Q326 power moved 2.5% lower to £99.00/MWh.
- The annual October 26 contract rose 0.1% to £88.25/MWh, 19.9% higher than the same time last year (£73.63/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 0.9% to £109.00/MWh, in opposition to its baseload counterpart.
- June 26 peak power declined 3.9% at £98.00/MWh, and July 26 peak power decreased 1.0% to £100.00/MWh.
Annual October contract
- The annual October 26 peak power rose 0.6% to £96.29/MWh
- This is 0.3% higher than the same time last year (£96.00/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts saw gains last week, up on average by 0.5%.
Winter 26 power expanded 0.9% to £101.70/MWh, while summer 27 fell 0.9% to £74.80/MWh.
Seasonal peak power curve
- Most seasonal peak power contracts declined last week, down 0.6% on average.
Winter 26 and summer 27 peak power dropped 0.7% and 1.3% respectively, falling to £118.88/MWh and £76.00/MWh.
Commodity price movements
Oil and coal
- Last week continued bullish movements in the market, with Brent crude oil rising 1.2% to $107.44/bl.
Oil prices declined after President Donald Trump announced that he postponed a military strike against Iran on 19 May after direct appeals from the leaders of Qatar, Saudi Arabia, and the United Arab Emirates.
Meanwhile, a 30-day extension of the sanction’s waiver allowing countries facing energy shortages due to the Iran conflict to purchase Russian oil was announced on the same day by the US Treasury Secretary.
However, higher prices were supported by US Energy Information Administration data outlining commercial crude oil inventories fell by about 7.9 million barrels last week to 445 million barrels, significantly exceeding market expectations for a decline of around 2.5 million barrels.
Following the US strikes on Iran on 26 May, the potential for retaliation from Iran and an escalation to the conflict will likely keep prices elevated in the week ahead.
Carbon (UK and EU ETS)
- Across the week, both EU and UK ETS carbon prices saw minor losses, UK ETS prices decreased by 0.1% to average £51.84/t and EU ETS edged 0.2% lower to €75.67/t.
Market participants remained cautious, with limited risk appetite and weak responses from typical market drivers.
Ongoing discussions on the Middle East ceasefire, uncertainty on wider energy markets across Europe, and the upcoming ETS review all act to keep carbon prices trading in a limited and narrow range, resulting in a less attractive market for traders currently.
On the bearish side, strong solar and wind generation across Europe acted to dampen the residual load across Europe, limiting demand for fuelled generation, a typically more carbon-intensive source of generation, resulting in lower prices.
Ongoing uncertainty around US and Iranian relations continues to support volatility in the carbon markets, as the balance between potential diplomatic progress and escalation drives conflicting expectations for energy demand and industrial activity.
Wholesale price snapshot – Friday-on-Friday
Analysis provided by: Cornwall Insight