Energy Wholesale Market Review – 15 March 2024


Mixed movements were registered across tracked gas and power contracts this week, firstly finding upward support from disruption to Norwegian flows as maintenance occurs at fields across the Norwegian Continental Shelf effecting front-month contracts, in tandem with reduced LNG send-out from GB terminals. Consequently, April 24 gas was up 0.6% at 66.60p/th and May 24 gas increased 0.6% to 65.90p/th. Contrary to this, day-ahead gas fell 4.0% to 65.75p/th, as above-average temperatures across the UK act to decrease demand for gas-fired assets in the short-term. Likewise, day-ahead power fell 2.2% to £67.75/MWh, following losses across its gas counterpart. Elsewhere, most seasonal gas contracts declined last week, down by 0.7% on average. While summer 24 gas increased 0.3% to 66.50p/th, winter 24 gas dropped 0.1% to 78.90p/th, and summer 25 gas fell 1.0% to 72.50p/th. Opposing this, most seasonal power contracts boosted this week, up on average by 0.5%, as summer 24 and winter 24 expanded 0.8% and 0.7% respectively, rising to £62.50/MWh and £74.50/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 2.2% to £67.75/MWh, despite projections of lower wind generation for Monday, but acting to increase the reliance on more expensive gas-fired generation.
  • Opposing this, April 24 power climbed 2.0% at £62.75/MWh and May 24 power increased 2.5% to £61.50/MWh.

Annual October contract

  • Q224 power remained level at £61.00/MWh this week.
  • The annual April 24 contract rose 0.7% to £68.50/MWh, 47.9% lower than the same time last year (£131.50/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was up 0.3% to £82.00/MWh, opposing the trend registered across its baseload counterpart – albeit marginally.
  • April 24 peak power declined 0.1% at £62.70/MWh, whereas May 24 peak power increased 0.1% to £59.85/MWh

Annual October contract

  • The annual April 24 peak power declined 1.9% to £75.63/MWh
  • This is 42.4% lower than the same time last year (131.25/MWh)

Seasonal power prices

Seasonal baseload power contracts

  • Most seasonal power contracts boosted this week, up on average by 0.5%.
  • Summer 24 and winter 24 expanded 0.8% and 0.7% respectively, rising to £62.50/MWh and £74.50/MWh.

Seasonal peak power curve

  • All seasonal peak power contracts declined this week, down 1.8% on average.
  • Summer 24 and winter 24 peak power dropped 1.1% and 2.5% respectively, falling to £65.25/MWh and £86.00/MWh.

Commodity price movements

Oil and coal

  • The price of Brent crude has remained close to previous weeks rising 0.7% to average $83.41/bl, as conflict in the Middle East and the associated risk price premium continues to be baked in.
  • Stronger gains were supported by news that ceasefire negotiations between Israel and Hamas have deadlocked, likely extending the conflict and its impact on shipping via the Red Sea.
  • Similarly, a drop in US stockpiles and higher demand projections from the International Energy Agency act to push prices up as supply levels are set to remain constricted into the second quarter of this year.
  • Select geopolitical situations, such as the ongoing war in the Middle East, US crude inventory levels, OPEC+ supply cuts, and increased Chinese demand have led the commodity entering into a period of volatility in which prices are swayed by these factors regularly. As a result, it is likely oil prices will continue to be volatile into the future.

Carbon (UK and EU ETS)

  • Opposing the recent movements observed, the UK and EU carbon markets recorded diverging pricing fundamentals, with the EU ETS falling 3.3% to average €57.00/t, and the UK ETS rising 1.9% to average £36.26/t
  • Across the UK ETS, prices were supported by reduced wind generation on the system increasing reliance on more expensive forms of power generation, typically gas-fired, to meet demand levels – as a result UK ETS carbon prices rose to the highest level seen since January 10 at £37.60/t on 15 March.
  • Looking at the EU ETS, downward pricing sentiment came from losses seen across gas prices following above-average temperatures acting to reduce gas-for-heating demand.
  • Following improvements to the capacity surrounding European LNG regasification, prices into the future could likely decrease. This, in tandem with rising temperatures into the summer months, should push carbon prices lower.

Wholesale price snapshot – Friday-on Friday

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