Energy Wholesale Market Review – 04 March 2024


All power and gas contracts increased this week, amid lower temperatures boosting gas heating demand, and low wind outturn in the latter half of the week. Day-ahead gas rose 13.5% to 64.60p/th, following colder temperatures supporting rising gas heating demand, coupled with low LNG send out from the South Hook terminal on Friday. Day-ahead power rose 18.3% to £68.00/MWh, following its gas counterpart, with further gains supported by easing wind outturn projections, increasing reliance on gas-fired generation. Similarly, April 24 gas was up 13.7% at 62.80p/th, and May 24 gas increased 11.4% to 62.50p/th. All tracked seasonal gas contracts boosted this week too, up by 9.3% on average, while both summer 24 and winter 24 gas increased 12.4% and 8.2% respectively, lifting to 63.50p/th and 77.50p/th. All seasonal power contracts boosted this week, up on average by 6.7%, as summer 24 and winter 24 expanded 10.2% and 5.6% respectively, rising to £59.50/MWh and £71.30/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 18.3% to £68.00/MWh, following reduced wind outturn throughout the week.
  • April 24 power climbed 10.3% at £59.00/MWh and May 24 power increased 9.0% to £58.00/MWh.

Annual October contract

  • Q224 power moved 10.4% higher to £58.25/MWh.
  • The annual April 24 contract rose 7.7% to £65.4/MWh, 52.3% lower than the same time last year (£137/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was up 6.5% to £82.00/MWh, following its baseload counterpart higher.
  • April 24 peak power gained 12.0% at £63.50/MWh, and May 24 peak power increased 7.2% to £58.38/MWh.

Annual October contract

  • The annual April 24 peak power rose 4.5% to £73.68/MWh.
  • This is 48.6% lower than the same time last year (143.25/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts boosted this week, up on average by 6.7%.
  • Summer 24 and winter 24 expanded 10.2% and 5.6% respectively, rising to £59.50/MWh and £71.30/MWh

Seasonal peak power curve

  • All seasonal peak power contracts boosted this week, up 4.9% on average.
  • Summer 24 and winter 24 peak power increased 7.3% and 2.5% respectively, falling to £63.30/MWh and £84.05/MWh.

Commodity price movements

Oil and coal

  • Throughout the week, Brent crude averaged $82.67/bl – largely unchanged from the week before, seeing mixed movement throughout the week.
  • Slight gains were observed in the early part of the week amid further reported attacks on commercial vessels in the Red Sea region
  • Further support came from news of easing Eurozone inflation, boosting the case for interest rates to be reduced by the European Central Bank. However, these drivers were offset on Friday by news that Chinese manufacturing activity fell for the fifth consecutive month
  • Looking into the future, projections suggest crude demand is set to rise, pointing to a bullish pricing environment for the year.
  • However, the global/supply demand balance will remain dependent on the unfolding events in the Middle East; Chinese economic growth; and US inflationary pressures

Carbon (UK and EU ETS)

  • In contrast to the previous week, both carbon markets registered gains in their average prices last week, rising 3.4% on average in the EU ETS and by 5.6% in the UK ETS
  • Gains were influenced in large part thanks to the higher usage of gas generation on the electricity grid amid the relatively low levels of renewable generation that were observed this week
  • For the UK scheme in particular, the low levels of wind incited higher levels of coal generation during the week – further boosting UK ETS value
  • Looking to the future, lower wind generation protections in the week ahead could see carbon prices increase, as higher reliance will be placed on more expensive, and more carbon intensive, forms of power generation.

Wholesale price snapshot – Friday-on Friday

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