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 bullish movements last week, with day-ahead power as the only exception. Day-ahead gas rose 2.3% to 78.00p/th, following the announcement that Iran would suspend its International Atomic Energy Agency cooperation raising geopolitical tensions, coupled with announced extensions to outages on the Norwegian Continental Shelf. On a similar note, power prices began the week with a higher day-ahead price of £92.00/MWh, findingsupport from above-average temperatures increasing demand for power intensive cooling appliances, low renewable output, and concerns over low French nuclear output. However, the outlook for wind and solar output improved throughout the week – with wind contributing to 54.8% of the generation mix on the 5 June – and day-ahead power fell to 60.94/MWh on 4 June. August 25 gas was up 1.2% at 79.30p/th, and September 25 gas rose 0.3% to 82.68p/th. Likewise, all seasonal gas contracts registered gains last week, up by 1.9% on average, with both winter 25 and summer 26 gas boosting 1.4% and 1.7% respectively, settling at 92.28p/th and 82.75p/th. All seasonal baseload power contracts also saw gains last week, expanding 1.2% on average, as winter 25 power rose 1.0% to £83.85/MWh, while summer 26 increased 0.8% to £71.30/MWh.
Baseload wholesale electricity price
Forward curve comparison
- Day-ahead power fell 24.8% to £60.94/MWh, following a period of higher wind and solar generation coupled with lower temperatures compared to the week previous
- However, August 25 power climbed 2.8% to £72.45/MWh and September 25 power rose 0.6% to £77.85/MWh.
Annual October contract
- Q425 power averaged £82.75/MWh across the week.
- The annual October 25 contract rose 0.9% to £77.58/MWh, 0.7% lower than the same time last year (£78.13/MWh).
Peak wholesale electricity price
Forward curve comparison
- Day-ahead peak power was down 2.3% to £72.30/MWh, following its baseload counterpart decrease.
- August 25 peak power rose 2.5% at £73.30/MWh, and September peak power rose 1.5% to £82.90/MWh.
Annual October contract
- The annual October 25 peak power rose 2.7% to £89.70/MWh.
- This is 11.4% lower than the same time last year (£101.25/MWh).
Seasonal power prices
Seasonal baseload power contracts
- All seasonal power contracts rose last week, up on average by 1.2%.
- Winter 25 power rose 1.0% to £83.85/MWh, while summer 26 rose 0.8% to £71.30/MWh.
Seasonal peak power curve
- All seasonal peak power contracts experienced gains last week, up 3.1% on average.
- Winter 25 and summer 26 peak power rose 0.8% and 6.5% respectively, up to £99.30/MWh and £73.50/MWh.
Commodity price movements
Oil and coal
- The average price of Brent crude fell to $67.78/bl, dropping to a low of $67.50/bl on 2 July amid renewed concerns over US trade policy.
- During the week, U.S. President Donald Trump stated he does not plan to extend a pause on tariffs, which could have a negative influence on economic growth and investor signals, subsequently driving down oil demand.
- In addition, Iran’s commitment to the Nuclear Non-Proliferation Treaty and Safeguards Agreement has led to reduced concerns over oil supply, driving down prices.
- Bearish signals are further supported on the supply side, with talks of increased output from the OPEC+ alliance in August likely to have an influence over the coming months
- Bullish signals were observed in the API 2 Coal market, as prices reached the highest level seen since January, at $109.45/t on 2 July
- High prices saw support from low coal stocks across Europe’s APA ports; reduced levels of hard coal powered generation in Germany; and falls in the price of gas due to easing tensions in the Middle East reducing the demand for gas-to-coal fuel switching
Carbon (UK and EU ETS)
- Both UK and EU carbon prices saw week-on-week losses, with the UK ETS price falling to a two-month low on 30 June, at £46.38/t, with the EU ETS at monthly low of €69.22/t on the same day.
- However, toward the end of the week UK and EU prices rose slightly, reaching £48.43/t and €72.23/t respectively.
- This was driven by European equities staging a recovery; influence from low nuclear output; as well as continued above average temperatures across the continent sustaining the demand for carbon-intensive cooling appliances.
- Toward the end of the week, EU and UK ETS prices fell due to warnings from the Central Bank around unresolved trade deals ahead of the end to tariff pause on 9 July – providing bearish signals across both markets.
- The 3 July saw the legislative proposal published for the European Commission 2040 climate target.
- Set to take effect from 2036, the proposal could have a bullish influence on EU ETS prices as it bans the use of international credits in the scheme; however, the targets set are largely as expected.
Wholesale price snapshot – Friday-on Friday
Analysis provided by: Cornwall Insight