Energy Wholesale Market Review – 05 January 2024


This week saw a reversal of recent bearish price movements across most gas and power wholesale contracts. Subsequently, we saw the majority of gas and power contracts increase week-on-week. Day-ahead gas rose 9.4% to 87.50p/th, due to lowering temperatures seen during the week, boosting gas demand for heating. Current forecasts also point towards an upcoming cold weather spell in north-west Europe which could extend towards the UK in the coming week – likely to play a role in shaping the near-term wholesale pricing environment. Day-ahead power rose 36.4% to £90.00/MWh, following low wind outturn throughout the week, increasing gas for power demand, coupled with rising demand projections for Monday. February 24 gas was down 2.2% at 85.70p/th, and March 24 gas increased 4.9% to 84.80p/th. Most seasonal gas contracts boosted last week, up by 0.1% on average, while summer 24 gas increased 1.9% to 83.70p/th, whereas winter 24 gas dropped 1.3% to 98.50p/th.  Similarly, most seasonal power contracts declined this week, down on average by 1.5%. Summer 24 power was static at £78.50/MWh, while winter 24 fell 2.1% to £94.50/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 36.4% to £90.00/MWh, following its gas counterpart and UK ETS prices higher, paired with rising demand forecasts.
  • February 24 power increased 0.9% at £88.00/MWh and March 24 power grew 0.7% to £81.5/MWh.

Annual October contract

  • Q224 power moved 8.5% lower to £78.5/MWh.
  • The annual April 24 contract lost 1.1% to £86.5/MWh, 53.9% lower than the same time last year (£187.5/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was up 14.2% to £122.75/MWh, following its baseload counterpart.
  • February 24 peak power gained 1.2% at £106.2/MWh, and March 24 peak power decreased 1.7% to £89.35/MWh.

Annual October contract

  • The annual April 24 peak power rose 0.3% to £96.20/MWh
  • This is 55.1% lower than the same time last year (214.45/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • Most seasonal power contracts declined this week, down on average by 1.5%.
  • Summer 24 power was static at £78.50/MWh, while winter 24 fell 2.1% to £94.50/MWh.

Seasonal peak power curve

  • All seasonal peak power contracts declined this week, down 0.3% on average.
  • Summer 24 and winter 24 peak power dropped 0.6% and 0.1% respectively, falling to £82.50/MWh and £109.90/MWh.

Commodity price movements

Oil and coal

  • Brent crude registered a downward movement across the previous week, falling 2.6% week-on-week to average $77.59/bl.
  • Price losses were supported by news of a larger-than-expected increase in gasoline and diesel inventories in the US, in tandem with weak economic and inflation data in the Eurozone.
  • Price gains were limited however, by on-going supply concerns from the Middle East following the shutdown of Libya’s Sharara oilfield by local protestors – compounding on-going wider market supply concerns related to attacks on vessels in the Red Sea.
  • Brent crude oil is anticipated to register gains in the upcoming months, with strong demand expectations arising due to China’s upcoming holiday period, paired with continued global supply concerns subject to geopolitical events.

Carbon (UK and EU ETS)

  • During the reporting period, price decreases were registered across both ETS markets following increased selling activity from traders.
  • However, stronger gains were limited by decreased week-on-week wind generation, acting to tighten system margins and increase reliance on more expensive forms of power generation
  • The beginning of a new trading year will continue to buoy prices across the short-term, increased further by projections of below-average temperatures in the week ahead acting to bolster both domestic demand and demand across the continent.
  • Similarly, over the coming weeks, carbon prices across both schemes will continue to be heavily related to the amount of wind generation on their respective grid – especially in GB where wind accounts for a significant proportion of the generation mix.

Wholesale price snapshot – Friday-on Friday

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