10 December 2021

Headlines

Generally, wholesale energy prices underwent another strong week of price growth, with gains across all contracts in gas and baseload power, the outlier being the summer 24 gas contract. Day-ahead gas rose 9.9% to 255.00p/th, following select periods of system undersupply and lower Norwegian imports, after an unplanned outage at Troll gas field. Similarly, day-ahead power rose 4.8% to £238.00/MWh, taking direction from strong gains seen across the board in near-term gas contracts. January 22 gas was up 11.1% at 259.50p/th, and February 22 gas increased 11.4% to 261.00p/th. The majority of seasonal gas contracts saw gains this week, rising by 17.2% on average, while both summer 22 and winter 22 gas increased 37.3% and 38.0% respectively, lifting to 162.25p/th and 166.00p/th. All seasonal power contracts grew this week, up on average by 17.1%, as summer 22 and winter 22 expanded 29.7% and 29.0% respectively, rising to £154.00/MWh and £160.00/MWh.

Baseload electricity
  • Day-ahead power rose 4.8% to £238.00/MWh, following strong gains made in near-term gas contracts this week.
  • January 22 power climbed 10.0% at £330.00/MWh and February 22 power increased 8.1% to £292.00/MWh.
  • Q122 power moved 10.6% higher to £282.00/MWh.
  • The annual April 22 contract rose 29.3% to £157/MWh, 224.0% higher than the same time last year (£48.45/MWh).
Forward Curve Comparison

Annual April Contract

Peak electricity
  • Day-ahead peak power was down 6.3% to £300.00/MWh, against trends set in baseload power.
  • January 22 peak power gained 20.0% at £510/MWh, and February 22 peak power decreased 5.2% to £365.00/MWh.
  • The annual April 22 peak power rose 25.8% to £184.13/MWh
  • This is 236.6% higher than the same time last year (54.7/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

  • All seasonal power contracts grew this week, up on average by 17.1%.
  • Summer 22 and winter 22 expanded 29.7% and 29.0% respectively, rising to £154.00/MWh and £160.00/MWh.
  • All seasonal peak power contracts increased this week, rising 31.0% on average.
  • Summer 22 and winter 22 peak power increased 31.7% and 21.0% respectively, rising to £171.25/MWh and £197.00/MWh.
Commodity price movements

Oil and Coal

Carbon

  • Brent crude prices rose 2.7% from the previous week to average $74.31/bl. Prices still remain ~50% higher than the same time a year prior.
  • Brent crude prices continue to remain particularly sensitive to developments with the COVID-19 Omicron variant. More specifically this week, initial reports that the new variant is not expected to significantly dampen global growth provided some support to the market.
  • However, the threat of Omicron more generally remains prevalent. Changes in the outlook of associated impacts attributed to the variant can steer prices in either direction.
  • Carbon prices saw more gains again this week, with UK ETS prices up 3.1% to £72.38/t. The EU ETS mirrored these trends, up 8.5% to €82.93/t. The EU ETS also reached a record high of €88.50/t on 8 December.
  • Monthly average UK ETS carbon prices in September, October and November 2021 were all above the December CCM trigger price of £52.88/t.
  • This means that the scheme’s CCM has been triggered for December 2021.
  • The UK ETS authority are now expected to meet to discuss the level of intervention required if any
  • A decision either way is expected on 16 December
Wholesale price snapshot 

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