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 tracked power and gas contracts registered bearish movements last week, with day-ahead power as the only exception. Day-ahead gas fell 21.3% to 76.25p/th, following the announcement of a ceasefire between Israel and Iran, easing security of oil and gas supply concerns in the region, coupled with improving supply from the Norwegian Continental Shelf. Conversely, power prices began the week with a low day-ahead price of £52.86/MWh with wind generation accounting for ~59% of the generation mix on 23 June, driving down prices. However, decreased wind availability, paired with stronger cloud cover, limiting solar generation, and rising temperatures increasing cooling demand all contributed to price gains across the week, resulting in day-ahead power rising 93.1% to £81.00/MWh. July 25 gas was down 20.7% at 76.20p/th, and August 25 gas decreased 20.6% to 78.33p/th. All seasonal gas contracts declined last week, down by 9.1% on average, with both winter 25 and summer 26 gas dropping 16.6% and 11.5% respectively, subsiding to 91.05p/th and 81.40p/th. All seasonal power contracts also saw losses last week, easing 8.0% on average, as winter 25 power lowered 12.2% to £83.00/MWh, while summer 26 fell 8.9% to £70.75/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power rose 93.1% to £81.00/MWh, following increased reliance on fuelled generation due to lower renewable outturn and increased cooling demand across last week.
- July 25 power slipped 12.4% at £71.50/MWh and August 25 power decreased 15.3% to £70.50/MWh.
Annual October contract
- Q325 power moved 14.5% lower to £73.00/MWh.
- The annual October 25 contract lost 10.7% to £76.88/MWh, 1.9% lower than the same time last year (£78.40/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 39.6% to £74.00/MWh, following its baseload counterpart upwards.
- July 25 peak power declined 13.5% at £73.25/MWh, and August 25 peak power decreased 17.2% to £71.50/MWh.
Annual October contract
- The annual October 25 peak power lowered 10.0% to £87.33/MWh
- This is 14.0% lower than the same time last year (£101.50/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts declined last week, down on average by 8.0%.
- Winter 25 power decreased 12.2% to £83.00/MWh, while summer 26 fell 8.9% to £70.75/MWh.
Seasonal peak power curve
- All seasonal peak power contracts experienced losses last week, reducing 10.3% on average.
- Winter 25 and summer 26 peak power dropped 10.3% and 14.5% respectively, falling to £98.50/MWh and £69.00/MWh.
Commodity price movements
Oil and coal
- Brent crude oil broke the previous trend of week-on-week increases last week, with the average price easing by 7.3% to $69.76/bl.
- This price drop was a result the announcement of a ceasefire between Israel and Iran, which eased concerns over the supply of crude oil from the Middle East and saw prices return to levels seen before the conflict.
- Additionally, talks of an OPEC+ output increase in August – following increased production in May, June and July –provides bearish signals for oil prices over the coming months.
- OPEC+ has stated it is set to boost production by 411,000 barrels per day in August, with the group set to meet on 6 July.
- Also, last week in Ireland ESB announced the ending of coal usage at Moneypoint Power Station, highlighting the reducing demand for coal, with hard-coal power generation in the SEM dropping by 20.5% since 2020.
Carbon (UK and EU ETS)
- Both carbon auctions recorded mild losses last week, with the EU ETS easing 3.0% to €71.87/t, and the UK ETS dropping 6.0% to £49.57/t.
- Carbon prices were driven down by easing NBP and TTF gas prices; in addition to high wind generation in Germany.
- Renewable generation was largely unchanged across the continent, with periods of decreased wind generation balanced by high solar output during the week limiting the demand for carbon-intensive power.
- Toward the end of the week, UK and EU prices rose slightly, driven by significantly above-average temperatures across the continent, which lead to increased demand for carbon-intensive cooling appliances.
- The deadline for the EU’s 2040 Climate Target approaches on 3 July, which is thought to have direct implications for defining the supply curve of the EU ETS and a subsequent impact on EUA prices.
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight