14 October 2022

Headlines

This week saw predominately bearish price movements for wholesale gas and power contracts in GB. We continue to observe volatility particularly in nearer-term contracts, but with the general pricing sentiment over recent weeks largely trending downwards. Day-ahead gas fell 25.1% to 125.00p/th, taking direction from lowering prices on the continent towards the end of the week as EU gas storage levels reach near 100% fullness. Day-ahead power fell 6.3% to £150.00/MWh, driven in part by bearish movements across near-term gas and carbon contracts. Similarly, November 22 gas was down 7.8% at 268.00p/th, and December 22 gas decreased 6.3% to 410.00p/th. All seasonal gas contracts declined last week, down by 3.2% on average, while both summer 23 and winter 23 gas dropped 2.3% and 5.3% respectively, subsiding to 368.00p/th and 377.00p/th. Like their equivalent gas contract, all seasonal power contracts declined this week, down on average by 3.6%, as summer 23 power decreased 6.2% to £305.00/MWh, while winter 23 fell 4.3% to £330.00/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 6.3% to £150.00/MWh, following the strong bearish movements set from its equivalent gas contract, along with easing carbon prices
  • November 22 power slipped 18.0% at £410.00/MWh and December 22 power decreased 6.3% to £600.00/MWh.

Annual October contract

  • Q123 power moved 11.2% higher to £745.00/MWh.
  • The annual April 23 contract lost 5.2% to £317.5/MWh, 261.3% higher than the same time last year (£87.88/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 18.7% to £191.00/MWh, following baseload power lower.
  • November 22 peak power declined 10.8% at £700/MWh, and December 22 peak power increased 4.4% to £940/MWh

Annual October contract

  • The annual April 23 peak power rose 6.5% to £379.5/MWh
  • This is 375.0% higher than the same time last year (79.9/MWh).)

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 3.6%.
  • Summer 23 power decreased 6.2% to £305.00/MWh, while winter 23 fell 4.3% to £330.00/MWh.

Seasonal baseload power curve

  • Most seasonal peak power contracts declined this week, down 6.7% on average.
  • Summer 23 and winter 23 peak power dropped 8.9% and 4.5% respectively, falling to £334.00/MWh and £425.00/MWh.

Commodity price movements

Oil and coal

  • Brent crude prices rose 3.5% last week to average $94.45/bl. Last week, brent crude prices registered their second consecutive week of price rises on average, reversing what had previously represented a period of bearishness.
  • Cuts to OPEC+ supply targets also continue to provide a foundation of price support, with production cuts of 2mn bpd set to come into effect from 1 November.
  • Strikes at Total Energies French refinery and storage sites also provides some bullish price support, with subsequent concerns over supply disruption.

Carbon (UK and EU ETS)

  • EU and UK ETS prices saw downward movements this week. EU ETS fell 0.8% to average €67.24/t, whilst UK ETS carbon retracted 2.2% to £72.16/t.
  • Some bearishness for European and UK carbon prices can be attributed to forecasts of ‘above average’ seasonal temperatures expected across next week.
  • Prices for carbon remain volatile at a time where the uncertainty surrounding fossil fuel supply into Europe and the UK is a prominent lever for price movement

Wholesale price snapshot – Friday-on Friday

Power to make change

We believe that people power can change the world. We are here to help you have a positive impact on the planet. Together we can make a difference.

Take the next step

Net Zero 2030

Leading by example, we are committed to becoming carbon neutral by 2023 and achieving net zero business emissions by 2030.

Read our net zero strategy

Our people

As an Employee Ownership Trust we embrace the three pillars of good communication, governance and leadership, putting our people first.

Learn more about us

By your side

Staying at the forefront of industry, we embrace and drive change, delivering solutions at pace and scale to meet the modern challenges of energy and sustainability.

Meet our people