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 contracts reported losses this week, due to continued rising demand coupled with extensions to the outages at Heysham 1, and both Hartlepool reactors. Day-ahead gas fell 0.9% to 78.75p/th, following improved supply from stable Norwegian and French imports, easing supply margins. Moreover, day-ahead power fell 22.7% to £61.00/MWh, due to an uptick in wind generation, easing system supply margins. November 25 gas was down 0.7% at 80.30p/th, while December 25 gas increased 0.4% to 83.15p/th. Most seasonal gas contracts boosted last week, up by 1.1% on average, with both summer 26 and winter 26 gas increasing 1.2% and 1.3% respectively, lifting to 76.50p/th and 83.60p/th. However, all seasonal power contracts declined this week, down on average by 0.3%, as summer 26 power decreased 0.2% to £71.43/MWh, while winter 26 fell 0.3% to £79.65/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 22.7% to £61.00/MWh, following a forecasted increase in renewable outputs, despite an increase in demand for heating.
- November 25 power slipped 4.0% at £79.58/MWh and December 25 power increased 25.2% to £101.70/MWh.
Annual October contract
- Q126 power moved 19.7% higher to £100.85/MWh.
- The annual April 26 contract rose 12.2% to £84.95/MWh, 17.4% higher than the same time last year (£72.35/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 6.3% to £80.13/MWh, following trends seen across its baseload counterparts.
- November 25 peak power declined 2.0% at £101.58/MWh, and December 25 peak power increased 0.4% to £101.70/MWh.
Annual October contract
- The annual April 26 peak power rose 0.3% to £79.98/MWh
- This is 10.32% higher than the same time last year (72.50/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts boosted last week, up on average by 8.9%.
- Summer 26 and winter 26 expanded 3.2% and 20.3% respectively, rising to £73.85/MWh and £96.05/MWh.
Seasonal peak power curve
- Most seasonal peak power contracts declined last week, down 0.3% on average.
- Summer 26 and winter 26 peak power dropped 0.1% and 0.3% respectively, falling to £73.85/MWh and £96.05/MWh.
Commodity price movements
Oil and coal
- The average price of Brent crude increased week-on-week, up 1.9%, reaching a peak of $66.51/bl on 24 October, and with a trough of $60.51 on 20 October.
- The weeks latter half saw a bullish pricing trend, as President Trump placed sanctions on two of Russia’s biggest oil companies, Rosneft and Lukoil, on 23 October
- Following the US Sanctions, India’s largest buyer of Russian crude – Reliance Industries – announced plans to reduce or cease imports of Russian oil, driving concerns of tighter near-term global supply and market disruption
- China also announced it would suspend purchases of seaborne Russian oil, following the latest US sanctions on Russian oil sparking concerns of tighter near-term global supply and market disruption
- The reduction and suspension in purchasing of Russian oil from both India and China sparks concerns of tighter near-term global supply and market disruption
Carbon (UK and EU ETS)
- Both EU and UK ETS prices trended slightly bullishly through the week as a trade-deal formed between the US and China indicate a stronger economic outlook. Due to the strong relationship between US-China relations and European Gas prices, this resulted in EU ETS prices trending bullish.
- A fall in temperature throughout the week across the UK and North-West Europe resulted in a slight increase in gas-fired demand, acting as a further driver for demand for ETS credits
- Forecasts of above-average temperatures in the week ahead, coupled with ‘wet and windy’ weather forecasts may result in a bearish signal for UK and EU ETS, due to an increase in renewable generation
- Following the trade-deal framework formed between the United States and China, the knock-on impacts of a sharp increase in oil and gas prices globally is expected to result in continued bullish movements of UK and EU ETS Carbon moving forward
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight