Energy Wholesale Market Review – 15 September 2023


It was a largely bearish week for gas and power contracts this week, continuing the trend of decreasing wholesale prices observed across much of 2023. Day-ahead gas fell 1.9% to 85.35p/th, following periods of above-average temperature during the week. However, losses were limited by extended maintenance works across the Norwegian Continental Shelf, limiting flows into GB from Norway. Likewise, day-ahead power dropped 12.5% to £80.50/MWh, taking direction from losses made in near-term gas markets and increased wind output during the week – loosening system margins. October 23 gas was down 1.7% at 87.25p/th, and November 23 gas decreased 3.2% to 108.90p/th. Most seasonal gas contracts fell this week too, down by 1.7% on average, with winter 25 the exception – seeing a 0.4% gain. Winter 23 and summer 24 gas dropped 2.0% and 1.9% respectively, subsiding to 121.50p/th and 126.00p/th.  All seasonal power contracts traded lower this week, down on average by 1.9%. Winter 23 and summer 24 power went down 2.4% and 2.7% respectively, falling to £111.75/MWh and £108.00/MWh. Brent crude oil reached a 10 month high this week, following OPEC+ supply cuts anticipated to last until the end of the year. Subsequently, prices were 3.0% higher at $93.90/bl. Meanwhile, UK ETS prices dropped to the lowest level since the scheme opened in May 2021, at £38.75/t.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 12.5% to £80.50/MWh, following its gas counterpart, with further losses supported by a spike in forecast wind outturn, loosening system margins.
  • October 23 power slipped 3.8% at £82.75/MWh and November 23 power decreased 4.2% to £103.50/MWh.

Annual October contract

  • Q423 power moved 2.9% lower to £101.00/MWh.
  • The annual October 23 contract lost 2.5% to £109.88/MWh, 64.0% lower than the same time last year (£305.00/MWh)

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 9.2% to £76.25/MWh, following its baseload counterpart lower.
  • However, October 23 peak power gained 4.8% at £95.18/MWh, and November 23 peak power increased 2.0% to £129.58/MWh.

Annual October contract

  • The annual October 23 peak power fell 1.4% to £125.00/MWh
  • This is 71.7% lower than the same time last year (442.25/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 1.9%.
  • Winter 23 power decreased 2.4% to £111.75/MWh, while summer 24 fell 2.7% to £108.00/MWh.

Seasonal peak power curve

  • All Seasonal peak power contracts declined this week, down 1.4% on average.
  • Winter 23 and summer 24 peak power dropped 0.9% and 1.9% respectively, falling to £134.74/MWh and £115.25/MWh.

Commodity price movements

Oil and coal

  • Brent crude reached a 10-month high of $93.90/bl on 15 September with multiple bullish factors impacting the commodity.
  • Brent crude continued to register a week-on-week gains, up 3.0% to $92.07/bl this week, following extensions to output cuts by Saudi Arabia and Russia, acting to tighten global supply.
  • Similarly, reports of a boost in Chinese industrial demand further strengthened the bullish sentiment.
  • Chinese economic growth is set to resurge according to some economists as the year progresses, further tightening the global supply/demand balance.
  • Similarly, OPEC+ output cuts, anticipated to last until 2024, and growing tensions between Russia and Ukraine – with the potential to threaten Russian oil shipments, provide a bullish pricing landscape into the future.

Carbon (UK and EU ETS)

  • As the disparity between scheme prices remains at an all-time high, due to recent policy adjustments across both schemes, the UK ETS experienced its lowest price since the scheme opened in May 2021
  • UK ETS prices fell to a record low of £38.75/t on 15 September, averaging £39.82/t across the week, representing an 8.8% drop. Drivers of decline were formed from a large drop in carbon-intensive power generation and lowering demand from industry.
  • Similarly, EU ETS carbon saw its lowest value in three months, with prices dropping to €81.33/t on 12 September, while registering a 2.2% drop to average €82.25/t.
  • Carbon prices across both the EU and UK ETS schemes are likely to remain volatile; given the level of unpredictability attached to gas supply into Europe for the remainder of 2023 and into 2024.

Wholesale price snapshot – Friday-on Friday

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