15 July 2022

Headlines

Wholesale power contracts experienced mixed price movements this week, whereas all tracked gas contracts registered week-on-week price losses. Subsequently, day-ahead gas fell 8.3% to 203.50p/th, following periods of system oversupply amid stronger UKCS production – coupled with anticipated lower demand into the weeks end, driven by the forecast heatwave in the UK. Conversely, day-ahead power rose 17.5% to £335.00/MWh, upward price movement can be attributed to lower wind outturn during the week, and strong export to the continent. Unlike the day-ahead baseload power contract, the front seasonal power contracts fell – with August 22 power down 18.3% at £245.00/MWh, and September 22 power decreasing 8.3% to £330.00/MWh. Elsewhere, most gas contracts declined this week, down by 5.7% on average, while both winter 22 and summer 23 gas dropped 7.1% and 9.6% respectively, subsiding to 423.20p/th and 284.80p/th. Similar downward price movements were seen across most seasonal power contracts, falling on average by 1.1%, with summer 23 down 7.5% to £245.00/MWh and the winter 23 contract dropping 3.1% to £264.00/MWh.

Baseload electricity  
  • Day-ahead power rose 17.5% to £335.00/MWh, attributed to lower wind outturn and continued high exports to the continent during the week.
  • August 22 power slipped 18.3% at £245.00/MWh and September 22 power decreased 8.3% to £330.00/MWh.
 
  • The annual October 22 contract rose 1.9% to £344.00/MWh, 467.7% higher than the same time last year (£60.6/MWh).
Forward Curve Comparison

 

 

Annual October Contract

Peak electricity  
  • Day-ahead peak power was up 37.3% to £405.00/MWh, following baseload power higher.
  • August 22 peak power gained 6.0% at £285.25/MWh, and September 22 peak power decreased 0.2% to £364.25/MWh.
 
  • The annual October 22 peak power rose 8.3% to £419.5/MWh
  • This is 501.6% higher than the same time last year (69.73/MWh).

Forward curve comparison


 

 

Annual October contract


 

Seasonal power prices  

Seasonal baseload power contracts

 

 

 

Seasonal baseload power curve


 
 

  • Most seasonal power contracts declined this week, down on average by 1.1%.
  • Summer 23 fell 7.5% to £245.00/MWh and the winter 23 contract dropped 3.1% to £264.00/MWh.
 
  • Some seasonal peak power contracts boosted this week, up 3.9% on average.
  • Winter 22 gas increased 14.1% to £561.25/MWh, whereas summer 23 peak power dropped 1.9% to £277.75/MWh.
Commodity price movements  
 

 

Oil and Coal


 

 

Carbon
  • Brent crude prices fell 4.9% this week to average $101.38/bl, a second consecutive week of price decline.
  • Primarily, concerns within oil markets at the prospect of an impending global recession weighed on prices strongly again this week.
  • It is feared that should a global recession take a firm hold, global demand for commodities such as oil will fall weighing on prices as a result.
  • Elsewhere, later in the week, reports that the US federal reserve is looking into the possibility of raising interest rates to combat inflation compounded week-on-week average losses for Brent crude this week.
  • API 2 coal rose 8.9% to average $286.20/t
 
  • The EU and UK ETS experienced conflicting price movements this week. The EU ETS climbed 1.0% to average €84.58/t whilst the UK ETS fell, down 2.2% to average £81.91/t.
  • For the EU ETS, in-line with significant rises in temperature, we observed increased cooling demand across western-Europe – raising the level of demand for A/C cooling, driving demand higher for fossil fuel generation in turn.
  • UK ETS prices on the other hand, were weighed upon by periods of higher wind and solar outturn in the week, placing less reliance on fossil fuels.
Wholesale price snapshot 


 

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