Energy Wholesale Market Review – 19 January 2024


Wholesale gas and power prices saw downward price movements throughout the week in GB, with strong European gas storage levels and stable Norwegian and UK Continental Shelf flows acting to soften margins, resulting in most power and gas contracts falling, with the one exception to this downward trend coming from the summer 25 contract for peak power. Day-ahead gas fell 12.5% to 70.00p/th, following continued strong LNG arrivals to GB terminals. Similarly, day-ahead power fell 38.1% to £49.50/MWh, following its gas counterpart in tandem with forecasts of high wind outturn next week upon the arrival of Storm Isha. February 24 gas was down 8.9% at 71.30p/th, and March 24 gas decreased 9.7% to 70.00p/th. All seasonal gas contracts declined this week, down by 5.4% on average, with both summer 24 and winter 24 gas dropping 8.0% and 5.3% respectively, subsiding to 71.30p/th and 88.80p/th. All seasonal baseload power contracts declined this week too, down on average by 5.6%, as summer 24 power decreased 8.0% to £64.75/MWh, and winter 24 fell 5.4% to £83.25/MWh.

Baseload electricity

Forward curve comparison

  • Day-ahead power fell 38.1% to £49.50/MWh, following strong wind outturn projections coupled with a correlated drop in demand expected to soften system margins on Monday.
  • February 24 power slipped 9.7% at £69.50/MWh and March 24 power decreased 10.8% to £64.25/MWh.

Annual October contract

  • Q224 power moved 8.6% lower to £63.75/MWh.
  • The annual April 24 contract lost 6.6% to £74.00/MWh, 55.2% lower than the same time last year (£165.00/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 20.3% to £91.50/MWh, following its baseload counterpart lower.
  • February 24 peak power declined 14.8% at £78.80/MWh, and March 24 peak power decreased 9.0% to £72.25/MWh.

Annual October contract

  • The annual April 24 peak power fell 11.6% to £78.27/MWh
  • This is 52.6% lower than the same time last year (165.00/MWh).

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 5.6%.
  • Summer 24 power decreased 8.0% to £64.75/MWh, while winter 24 fell 5.4% to £83.25/MWh.

Seasonal peak power curve

  • Most seasonal peak power contracts declined this week, down 11.1% on average.
  • Summer 24 and winter 24 peak power dropped 8.2% and 14.1% respectively, falling to £69.53/MWh and £87.00/MWh.

Commodity price movements

Oil and coal

  • Similar to the movement registered across the previous reporting period, Brent crude observed a marginal upward gain this week – rising 0.1% to average $78.11/bl.
  • We continue to see various bullish factors take hold of oil markets, with upwards price support found from on-going supply disruptions in the Red Sea due to the conflicts in the Middle East.
  • Likewise, disruption to US oil production and forecasted growth in global oil demand provides further support to the price of the commodity.
  • However, stronger gains across the commodity were limited by weaker-than-anticipated economic growth from China, impacting global demand levels.
  • Brent crude prices may experience growth in the future following recent projections from OPEC outlining that global oil demand is set to increase by 2.25 million barrels per day in 2024.

Carbon (UK and EU ETS)

  • This week represented a continued decrease across both UK and EU ETS carbon prices, driven down by continued strong selling by traders and low power demand, with the UK ETS carbon price falling 11.6% to £34.54/t and EU ETS carbon price dropping 8.8%/t to €64.57/t
  • We also saw EU ETS carbon prices fall to the lowest price seen since November 2021 on 18 January at €63.05/t, and UK ETS carbon prices drop to the lowest in a month also on 18 January at £33.75/t
  • The losses across both schemes found further bearish sentiment arising from stronger week-on-week wind generation acting to increase the contribution of renewable generation to the grid, in tandem with weaker gas prices as EU gas storage stocks remain well supplied
  • Carbon prices, the EU ETS in particular, are anticipated to decrease across 2024 following the expected downward trend across both the power and gas markets.

Wholesale price snapshot – Friday-on Friday

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