18 November 2022

Headlines

This week saw the reintroduction of more bullish pricing sentiment across gas and power wholesale contracts, noting the ongoing pricing disparity between day-ahead contracts and those further out on the forward curve. Day-ahead gas rose 33.3% to 136.00p/th, following the continual decline in seasonal average temperatures and taking bullish direction from marked gains in European gas prices in the week. Day-ahead power rose 14.8% to £155/MWh, primarily following the upward price direction of its equivalent gas contract and the higher demand placed on more expensive forms of generation such as CCGTs and gas peaking plant. December 22 gas was up 5.7% at 259.00p/th and January 23 gas increased 2.8% to 298.00p/th. Likewise, most seasonal gas contracts boosted this week, up by 2.2% on average. Summer 23 gas and winter 23 gas increased 6.9% and 2.0% respectively, lifting to 278.00p/th and 300.00p/th. Like gas, the majority of seasonal power contracts reported gains this week, up on average by 5.8%, as summer 23 and winter 23 expanded 7.4% and 5.2% respectively, rising to £252.50/MWh and £292.50/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 14.8% to £155.00/MWh, following the strong bullish movements of its equivalent gas contract.
  • December 22 power gained 1.7% to £262.50/MWh and January 23 power decreased 11.9% to £445.00/MWh.

Annual October contract

  • Q123 power moved 7.5% lower to £370.00/MWh.
  • The annual April 23 contract rose 6.2% to £272.5/MWh, 226.8% higher than the same time last year (£83.38/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was up 25.4% to £195.30/MWh, following baseload power higher.
  • December 22 peak power declined 6.5% at £352.3/MWh, and January 23 peak power decreased 14.8% to £775.5/MWh.

Annual October contract

  • The annual April 23 peak power rose 0.3% to £338.25/MWh
  • This is 290.1% higher than the same time last year (86.7/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All tracked seasonal power contracts boosted this week, up on average by 5.8%.
  • Summer 23 and winter 23 expanded 7.4% and 5.2% respectively, rising to £252.50/MWh and £292.50/MWh.

Seasonal baseload power curve

  • Most seasonal peak power contracts boosted this week, up 0.6% on average.
  • Summer 23 gas increased 3.1% to £295.25/MWh, while winter 23 peak power dropped 1.8% to £381.25/MWh.

Commodity price movements

Oil and coal

  • Brent crude prices fell week-on-week, down 3.2% to average $92.81/bl, reversing three consecutive weeks of price increases
  • Brent crude prices were weighed on this week, at least in part, by the on-going circulation of strict Covid-19 lockdown measures in China – fuelling concerns over future demand
  • Rising US interest rates and a stronger US dollar added additional downwards pressure on Brent crude prices this week

Carbon (UK and EU ETS)

  • EU and UK ETS prices saw collective bearish movements this week. EU ETS slipped 1.1% to average €73.95/t, whilst UK ETS carbon decreased 5.4% to £68.82/t
  • EU ETS prices were weighed on this week by forecasts of milder temperatures on the continental, acting to reduce demand for gas and fossil fuel-fired assets
  • Similarly, UK ETS prices were weighed on this week by higher levels of wind generation as the week progressed, acting to ease demand from gas and fossil fuel fired assets

Wholesale price snapshot – Friday-on Friday

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