30 September 2022

Headlines

This week represented a relatively mixed picture for wholesale gas and power contracts. Primarily, we observed losses on shorter-dated contracts whereas prices further out on the forward curve recorded gains – a possible response to on-going concerns over future supply and associated disruption, amid gas leaks at both Nord Stream 1 and 2 pipelines in European territorial waters. Day-ahead gas fell 25.0% to 172.50p/th, amid a steady stream of LNG flows reaching UK LNG import terminals, softening the near-term supply/demand balance and assisting net injections into storage. However, day-ahead power rose 17.2% to £225.00/MWh, with periods of lower wind outturn seen during the week, tightening system margins slightly. October 22 gas was down 15.6% at 245.00p/th, and November 22 gas decreased 9.8% to 381.00p/th. Most tracked seasonal gas contracts boosted this week, up by 2.1% on average, while summer 23 gas increased 0.6% to 435.00p/th and and winter 23 gas rose 2.7% to 455p/th. Elsewhere, all seasonal power contracts rose this week, up on average by 3.0%, as winter 22 and summer 23 expanded 5.3% and 1.4% respectively, rising to £600.00/MWh and £350.00/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 17.2% to £225.00/MWh, driven by periods of weak wind outturn seen at select points in the week.
  • October 22 power slipped 8.5% to £270.00/MWh and November 22 power decreased 1.6% to £600.00/MWh.

Annual October contract

  • Elsewhere, Q422 power moved remained unchanged at £540.00/MWh.
  • The annual October 22 contract rose 3.8% to £475.00/MWh, 346.0% higher than the same time last year (£106.5/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 1.5% to £260.25/MWh, following baseload power lower.
  • October 22 peak power declined 4.7% to £352.75/MWh, and November 22 peak power decreased 6.7% to £895.25/MWh.

Annual October contract

  • The annual October 22 peak power rose 9.7% to £593.25/MWh.
  • This is 453.7% higher than the same time last year (£107.15/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All tracked seasonal power contracts boosted this week, up on average by 3.0%.
  • Winter 22 and summer 23 expanded 5.3% and 1.4% respectively, rising to £600.00/MWh and £350.00/MWh.

Seasonal baseload power curve

  • Like baseload, all tracked seasonal peak power contracts rose this week, up 9.7% on average.
  • Winter 22 and summer 23 peak power increased 13.9% and 2.1% respectively, rising to £794.25/MWh and £392.25/MWh.

Commodity price movements

Oil and coal

  • Brent crude prices fell 4.0% this week to average $87.33/bl.
  • This week represented another bearish week for Brent crude prices on average, weighed by fears of an impending global recession which could alter consumption of oil globally.
  • Similarly, a stronger US dollar brought the average price of Brent crude down in the week.
  • Reports emerged from OPEC+ members of reducing output leading to doubt over supply, helping to cap any sustained losses.

Carbon (UK and EU ETS)

  • EU and UK ETS prices saw mixed movements this week. EU ETS fell 4.6% to average €66.59/t, whilst UK ETS carbon grew 2.2% to £75.79/t.
  • EU ETS prices this week were weighed upon by proposed intervention by EU energy ministers, which could see demand and consumption patterns altered in the latest proposals.
  • However, the outcome of the emergency summit with EU energy ministers remains unknown (at the time of writing).

Wholesale price snapshot – Friday-on Friday

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