Energy Wholesale Market Review – 10 February 2023

Headlines

It was a bearish week as all power and gas contracts decreased across the week. Day-ahead gas fell 9.3% to 136.00p/th, amid higher temperatures forecast for next week. Day-ahead power fell 17.6% to £140.00/MWh, influenced mainly by its gas counterpart, amid low wind forecast outturn. March 23 gas was down 9.6% at 133.75p/th, and April 23 gas decreased 10.3% to 135.00p/th. All seasonal gas contracts declined last week, down by 9.3% on average, while both summer 23 and winter 23 gas dropped 11.0% and 9.8% respectively, subsiding to 137.00p/th and 163.00p/th. All seasonal power contracts also experienced losses this week, declining on average by 6.7%, as summer 23 power decreased 7.6% to £145.00/MWh, while winter 23 fell 8.1% to £170.00/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 17.6% week-on-week to £140.00/MWh, amid increased wind levels forecasted for the beginning of next week.
  • March 23 power slipped 5.7% at £139.5/MWh and April 23 power decreased 8.4% to £142/MWh.

Annual October contract

  • Q223 power moved 9.0% lower to £142/MWh.
  • The annual April 23 contract lost 7.9% to £157.5/MWh, 29.6% higher than the same time last year (£121.5/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power declined 20.1% to £152.00/MWh, following its baseload equivalent
  • March 23 peak power eased 7.1% at £156.54/MWh, and April 23 peak power decreased 10.8% to £155.87/MWh.

Annual April contract

  • The annual April 23 peak power slipped  8.7% to £185.75/MWh
  • This is 30.4% higher than the same time last year (142.5/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 6.7%.
  • Summer 23 power decreased 7.6% to £145.00/MWh, while winter 23 fell 8.1% to £170.00/MWh.

Seasonal baseload power curve

  • All seasonal peak power contracts also saw losses this week, down 8.8% on average.
  • Summer 23 and winter 23 peak power dropped 10.0% and 7.7% respectively, falling to £158.00/MWh and £213.50/MWh.

Commodity price movements

Oil and coal

  • Brent crude oil remained relatively unchanged, easing 0.3% to average $83.76/bl, this week.
  • Prices began the week at $80.00/bl – their lowest value of the week, before rising consistently from Tuesday towards to Friday’s high of $86.20/bl
  • Monday prices fell to a low following federal interest rate hikes in the US, resulting in a stronger US Dollar
  • Friday saw crude prices move higher as Russia announced plans to reduce output by 0.5mn bpd in response to western sanctions

Carbon (UK and EU ETS)

  • This week has seen mixed price movements across the carbon markets.
  • EU ETS carbon saw mild losses of 0.8%, averaging €92.51/t this week, while UK ETS carbon saw 7.0% growth, averaging £82.71/t
  • For much of the week, prices were buoyed by low levels of wind outturn prompting higher levels of gas-fired generation

Wholesale price snapshot – Friday-on Friday

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