Energy Wholesale Market Review – 27 January 2023


All wholesale gas and power contracts experienced week-on-week losses this week, as we continue to observe the continual decline of wholesale energy prices in the early part of 2023 to date. Day-ahead gas fell 12.4% to 138.00p/th, following warmer weather trends, particularly as the week progressed – coupled with higher levels of renewable generation, reducing demand from gas-fired assets. Day-ahead power fell 33.3% to £115.00/MWh, following the bearish movements of day-ahead gas prices, coupled with higher wind and renewable outturn seen across the week. Subsequently, February 23 gas was down 11.5% at 138.00p/th, and March 23 gas decreased 11.5% to 138.00p/th. All seasonal gas contracts declined this week, down by 8.9% on average, while both summer 23 and winter 23 gas dropped 11.8% and 8.9% respectively, subsiding to 142.00p/th and 169.00p/th. Like gas, all seasonal power contracts declined this week, down on average by 6.8%, as summer 23 power decreased 9.1% to £141.75/MWh, while winter 23 fell 6.8% to £172.50/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 33.3% to £115/MWh, following the introduction of warmer weather returning mid-week and periods of higher wind outturn.
  • February 23 power slipped 11.0% at £138/MWh and March 23 power decreased 8.6% to £138/MWh.

Annual October contract

  • Q223 power moved 9.6% lower to £141/MWh.
  • The annual April 23 contract lost 7.8% to £157.13/MWh, 37.2% higher than the same time last year (£114.5/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 19.5% to £147.40/MWh, following baseload power lower
  • February 23 peak power declined 18.5% at £156.5/MWh, and March 23 peak power decreased 11.0% to £152.2/MWh.

Annual April contract

  • The annual April 23 peak power rose 6.9% to £190.4/MWh
  • This is 53.5% higher than the same time last year (124/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 6.8%.
  • Summer 23 power decreased 9.1% to £141.75/MWh, while winter 23 fell 6.8% to £172.50/MWh.

Seasonal baseload power curve

  • Like baseload, all seasonal peak power contracts moved lower this week, down 7.0% on average.
  • Summer 23 and winter 23 peak power dropped 7.3% and 6.6% respectively, falling to £159.40/MWh and £221.40/MWh.

Commodity price movements

Oil and coal

  • Brent crude prices climbed week-on-week, up 2.2% to average $87.52/bl.
  • Future Chinese demand growth has registered signs of price improvement again this week, recognising China as of the largest crude importing countries, supported further by the ending of the majority of national COVID-19 restrictions.
  • Similarly, an optimistic inflation recovery outlook from the US towards the back-end of the week also helped prices climb as the week matured.
  • However, we do recognise that the current global oil market remains volatile, particularly with fears of an impending global recession and subsequent concerns over future global demand.

Carbon (UK and EU ETS)

  • EU and UK ETS prices saw bullish price movements this week, a second consecutive week of price rises. EU ETS climbed 4.8% to average €85.25/t, while UK ETS carbon rose 1.0% to £68.18/t.
  • For this week more specifically, colder weather at the front-end of the week encouraged higher demand for fossil-fuel fired assets to help manage supply and demand on the system.
  • The ESO had issued a notification to the market that they had instructed the warming of winter contingency coal units for potential use on 26 January.
  • Later that day however, the ESO confirmed that the coal units instructed were told to stand down.

Wholesale price snapshot – Friday-on Friday

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