26 August 2022

Headlines

All gas and power contracts increased this week, with many longer-term contracts hitting all-time highs. Gas contracts along the curve were pushed higher following news that Nord Stream 1 will shut down for three days of maintenance at the end of August. This fuelled concerns of tight supply margins, with Norwegian gas fields and processing plants set to enter a heavy maintenance period in September. Day-ahead gas jumped 43.4% to 545.00p/th. September 22 gas climbed 25.2% to 575.92p/th and October 22 gas rose 22.0% to 641.78p/th. Seasonal gas contracts gained 24.8% on average. Winter 22 gas surged 26.8% to 766.55p/th, while summer 23 gas lifted 25.1% to 682.43p/th. Power prices followed the gas market higher, while low hydro levels in Europe and French nuclear outages continued to provide price support. Day-ahead power rose 25.0% to £500.00/MWh. September 22 power increased 25.4% to £535.00/MWh and October 22 power gained 27.3% to £630.00/MWh. Seasonal power contracts jumped 18.3% on average. Winter 22 power climbed 24.0% to £800.00/MWh and summer 23 power moved 21.7% higher to £545.00/MWh. Brent crude oil rose 6.2% to average $99.77/bl, while UK ETS carbon edged 1.9% higher to average £95.02/t.

Baseload electricity  
  • Day-ahead power gained 25.0% to £500.00/MWh, following gains in its gas counterpart.

  • September 22 power climbed 25.4% to £535.00/MWh and October 22 power increased 27.3% to £630.00/MWh.
 
  • Q422 power jumped 21.5% to £790.00/MWh.

  • The annual October 22 contract rose 23.1% to £672.50/MWh, compared to £72.03/MWh this time last year.

Forward curve comparison

 

Annual October Contract

Peak electricity  
  • Day-ahead peak power surged 60.1% to £640.48/MWh, following its baseload counterpart higher.

  • September 22 peak power slipped 2.5% to £570.45/MWh, while October 22 peak power jumped 51.0% to £691.83/MWh.
 
  • The annual October 22 peak power rose 22.1% to £817.12/MWh.

  • This is 879.9% higher than the same time last year (£83.39/MWh).

Forward curve comparison

 

Annual October contract

Seasonal power prices  

Seasonal baseload power contracts

 

Seasonal baseload power curve

  • All seasonal power contracts increased this week, up on average by 18.3%.

  • Winter 22 power climbed 24.0% to £800.00/MWh and summer 23 power moved 21.7 higher to £545.00/MWh.
 
  • All tracked seasonal peak power contracts increased this week, up 21.7% on average.

  • Winter 22 peak power rose 19.9% to £1,055.70/MWh and and summer 23 peak power climbed 26.2% to £578.54/MWh.
Commodity price movements  

Oil and Coal

 

Carbon

  • Brent crude oil rose 6.2% to average $99.77/bl, this week.

  • Signs of increasing fuel demand coupled with better than expected US economic data provided support to prices.

  • In addition, prospects of an output cut from OPEC+ members also helped push prices higher.

  • API 2 coal gained 6.7% to average $317.40/t.
 
  • EU ETS slipped 2.1% to average €91.80/t. In contrast, UK ETS carbon gained 1.9% to average £95.02/t.

  • Carbon prices saw little movement this week, ahead of the resumption of full auction volumes in September

  • .Auction demand remained weak, amid continued concerns of an economic downturn in Europe resulting in lower energy demand.
Wholesale price snapshot

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