26 November 2021

Headlines

The volatility in near-term pricing across gas and power prices was evident this week, with significant gains made, particularly in baseload and peak power contracts. Day-ahead gas rose 1.4% to 225.00p/th, following periods of much colder weather making its way from the continent and across the UK. Day-ahead power jumped 84.8% to £425.00/MWh, with tight system margins expected on Monday amid notably low wind generation. December 21 gas slipped 0.2% to 224.62p/th, and January 22 gas decreased 0.5% to 230.37p/th. Most seasonal gas contracts increased this week, up by 2.9% on average, as summer 22 and winter 22 gas climbed 2.0% and 2.5% respectively, lifting to 110.90p/th and 114.10p/th. All seasonal power contracts rose this week, up on average by 5.3%. Summer 22 and winter 22 gained 3.2% and 7.5% to £114.85/MWh and £122.50/MWh, respectively.

Baseload electricity
  • Day-ahead power rose 84.8% to £425.00/MWh, with tight system margins forecast for Monday.
  • December 21 power climbed 13.0% to £260.00/MWh and January 22 power increased 11.4% to £275.00/MWh.
  • Q122 power moved 12.1% higher to £252.25/MWh.
  • The annual April 22 contract rose 5.4% to £118.68/MWh, 153.0% higher than the same time last year (£46.91/MWh).
Forward Curve Comparison

Annual April Contract

Peak electricity
  • Day-ahead peak power was up 127.8% to £615.00/MWh, following baseload power higher
  • December 21 peak power gained 35.6% to £305.00/MWh, and January 22 peak power increased 55.7% to £425.00/MWh.
  • The annual April 22 peak power rose 1.8% to £128.75/MWh.
  • This is 145.1% higher than the same time last year (£52.53/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

  • All seasonal power contracts increased this week, up on average by 5.3%.
  • Summer 22 and winter 22 climbed 3.2% and 7.5% respectively, rising to £114.85/MWh and £122.50/MWh.
  • Most seasonal peak power contracts rose this week, up 0.2% on average.
  • Summer 22 peak power increased 3.7% to £127.49/MWh, while winter 22 peak power remained unchanged at £130.00/MWh.
Commodity price movements

Oil and Coal

Carbon

  • Brent crude prices fell 1.4% from the previous week to average $79.97/bl. Prices still remain ~70% higher than the same time a year prior.
  • There was a generally bearish sentiment felt across Brent crude markets this week. The Covid-19 crisis in continental Europe has intensified, with rising infections rates and threats of the Delta variant. This has forced some countries into lockdown, fuelling concerns over a down-turn in demand.
  • With tight market fundamentals, major economies in Japan, USA and China are looking to release strategic oil reserves, also weighing prices down.
  • Carbon prices saw strong gains last week, with UK ETS prices up 11.3% to average £66.58/t. The EU ETS mirrored these trends, up 5.6% to average €70.69/t. The EU ETS reached a record high of €72.92/t on Thursday 25 November.
  • A cold weather front making its way across much of North-West Europe and the UK supported carbon prices, particularly as the week matured, with increased EUA demand required to cover gas-fired power generation. Lower periods of wind and renewable output supported carbon prices also, particularly evident at the week’s start.
Wholesale price snapshot 

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