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 was level at 111.40p/th, following opposing movements from supply-and-demand signals and the conflict in the Middle East. While total gas demand remained subdued as we move further into the spring period, placing a bearish impact on prices at the day-ahead level, concerns surrounding the Iran conflict intensifying maintained a market premium, counterbalancing downward movements. Day-ahead power rose 0.9% to £107.00/MWh, amid strong wind generation at the weeks beginning. However, as wind outturn eased in the week’s latter half, price rises were seen as more expensive fuelled generation was dispatched. June 26 gas was down 0.2% at 110.48p/th, and July 26 gas increased 0.4% to 109.65p/th. Most seasonal gas contracts registered losses last week, down by 2.2% on average. Winter 26 gas increased 0.3% to 113.60p/th, while summer 27 gas dropped 3.2% to 85.15p/th. Most seasonal power contracts declined last week, down on average by 1.2%, as winter 26 power climbed 1.2% to £97.50/MWh, while summer 27 fell 1.0% to £74.75/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power rose 0.9% to £107.00/MWh, remaining broadly flat due to higher wind rates early in the week.
- June 26 power slipped 1.3% to £92.75/MWh and July 26 power decreased 1.3% to £91.73/MWh.
Annual October contract
- Q326 power moved 0.3% lower to £93.00/MWh.
- The annual October 26 contract rose 0.3% to £86.13/MWh, 21.0% higher than the same time last year (£71.18/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was up 6.3% to £102.00/MWh, following its baseload counterpart.
- June 26 peak power declined 1.5% to £92.55/MWh, and July 26 peak power decreased 3.0% to £91.00/MWh.
Annual October contract
- The annual October 26 peak power contract rose 2.6% to £93.18/MWh
- This is 0.7% higher than the same time last year (£92.55/MWh).
Seasonal power prices
Seasonal baseload power contracts
- Most seasonal power contracts declined last week, down on average by 1.2%.
- Winter 26 power rose 1.2% to £97.50/MWh, while summer 27 fell 1.0% to £74.75/MWh.
Seasonal peak power curve
- Most seasonal peak power contracts declined last week, down 2.7% on average.
- Winter 26 and summer 27 peak power dropped 0.7% and 3.1% respectively, falling to £113.00/MWh and £74.00/MWh.
Commodity price movements
Oil and coal
- Brent crude oil saw strong gains across the reporting period, rising 11.9% to average $111.87bl.
- Similarly, across the week persistent tensions around the Strait of Hormuz and uncertainty over a proposed reopening of the waterway kept markets on edge, with traders beginning to price in a longer-than-expected disruption.
- Brent crude oil started the week at $107.99/bl before rising to $117.70/bl on 29 April as traders priced in a higher risk of renewed military escalation, following reports that US officials were reviewing additional military and maritime options against Iran.
- US efforts to facilitate safe passage for neutral vessels through the Strait of Hormuz as part of “Project Freedom”, coupled with Iran’s moves to assert greater control over the waterway, have driven the geopolitical risk premium in the region higher again, resulting in a bullish outlook for the week ahead.
- However, seven OPEC+ member countries announced a production adjustment of 188,000bpd starting from June, increasing market supply and limiting stronger gains once it comes into effect.
Carbon (UK and EU ETS)
- UK & EU ETS carbon prices saw opposing movements. UK ETS rose 2.0% to £50.36/t, while EU ETS eased 3.8% to €74.13/t, respectively.
- EU ETS carbon prices were driven down by strong rates of renewable generation across mainland Europe, alongside the Labor Day holiday on 1 May reducing trading rates. However, stronger losses were limited as gas-to-coal switching remains favorable as higher Dutch TTF prices prompt greater levels of coal-fired generation.
- Across UK ETS carbon, prices reached £51.77/t on 28 April, the highest level seen since February as gas prices rose alongside. It is expected that UK ETS carbon prices will continue to rise as we move through the year due to the intentional reduction to supply in line with carbon reduction goals.
- However, stronger gains were limited by the Bank Holiday in GB reducing trading and liquidity in the market.
- Across the week ahead, it is expected that carbon prices will see an increase given the expectation of cooler weather conditions, and reduced wind generation rates across GB.
Wholesale price snapshot – Friday-on-Friday
Analysis provided by: Cornwall Insight