Energy Wholesale Market Review – 28 May 2024

Headlines

All power and gas contracts rose last week, finding bullish influence from reductions across gas flows from the Norwegian and UK Continental Shelves, and increased competition for the procurement of LNG, as a heatwave across northeast Asia bolstered gas-for-power demand. As a result, day-ahead gas rose 10.8% week-on-week to 82.25p/th, reaching the highest level seen since December 2023 at 88.00p/th on 23 May. Similarly, day-ahead power rose 10.1% to £78.9/MWh, finding upwards support from the movements registered across its gas counterpart, and reduced wind generation across the UK throughout the week. June 24 gas was up 10.5% at 82.03p/th, and July 24 gas increased 11.1% to 82.18p/th. All seasonal gas contracts saw gains last week, rising by 4.4% on average, with both winter 24 and summer 25 gas increasing 8.0% and 5.1% respectively, lifting to 101.65p/th and 92.25p/th. Similar movement were seen, with seasonal power contracts, up on average by 6.7%, as winter 24 and summer 25 expanded 9.0% and 5.6% respectively, rising to £91.85/MWh and £81.50/MWh. LNG prices also registered gains across the week, driven higher by increased gas prices across Europe and greater demand from Asian markets.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 10.1% to £78.90/MWh, following gains across its gas counterpart and reduced wind generation across the week
  • June 24 power climbed 10.8% at £74.25/MWh and July 24 power increased 10.9% to £77.25/MWh.

Annual October contract

  • Q324 power moved 11.8% higher to £78.25/MWh.
  • The annual October 24 contract rose 7.4% to £86.68/MWh, 23.1% lower than the same time last year (£112.75/MWh)

Peak electricity

Forward curve comparison

  • Day-ahead peak power was up 15.7% to £79.00/MWh, following its baseload counterpart higher
  • June 24 peak power gained 3.7% at £79.25/MWh, and July 24 peak power increased 9.5% to £81.75/MWh

Annual October contract

  • The annual October 24 peak power rose 6.6% to £98.28/MWh
  • However, this is 39.5% lower than the same time last year (162.50/MWh)

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts boosted last week, up on average by 6.7%.
  • winter 24 and summer 25 expanded 9.0% and 5.6% respectively, rising to £91.85/MWh and £81.50/MWh

Seasonal peak power curve

  • All Seasonal peak power contracts boosted last week, up 7.2% on average
  • winter 24 and summer 25 peak power increased 8.8% and 5.6% respectively, falling to £105.85/MWh and £86.25/MWh

Commodity price movements

Oil and coal

  • Brent crude remained relatively level week-on-week, dropping 0.4% to $82.63/bl as conflicting market fundamentals impacted the price of the commodity
  • Brent crude oil found bullish influence amid global political uncertainty following the death of the Iranian President, and damage to a Russian oil refinery
  • Likewise, projections of strengthening U.S. gasoline demand, and market expectations ahead of the outcome of the OPEC+ meeting on 1 June provided upwards pricing sentiment
  • However, these were counterbalanced as ongoing political uncertainties were muted by OPEC’s strong reserve capacity, and expectations that U.S. inflation rates may remain high, supported by growing U.S. crude oil inventories
  • Chinese demand will continue to play a pivotal role in determining oil prices across the remainder of 2024, with greater demand projections acting to increase price forecasts

Carbon (UK and EU ETS)

  • Following the movements seen across gas and power prices, both UK and EU ETS carbon registered gains across the reporting period with UK ETS carbon rising 13.0% to £44.02/t, and EU ETS carbon growing 8.7% to €75.72/t
  • Prices found support from reduced wind generation, with the UK ETS price further influenced by falling renewable output across the week
  • As a result, UK ETS carbon rose to the highest level seen since December 2023 at £46.19/t on 24 May. Similarly, EU ETS carbon rose to the highest level seen since January 2024 at €77.55/t on 23 May
  • DESNZ announced that the UK Emissions Trading Scheme (UK ETS) Authority has issued a consultation on proposals to include energy from waste and waste incineration in the scheme
  • The authority is seeking views on the scope of the scheme, participation, and monitoring requirements, impacts of the scheme and risks, how to adjust the scheme cap for waste

Wholesale price snapshot – Friday-on Friday

Power to make change

We believe that people power can change the world. We are here to help you have a positive impact on the planet. Together we can make a difference.

Take the next step

Becoming Net Zero

Leading by example, we became carbon neutral in 2023 and are committed to achieving net zero business emissions by 2030.

Read our strategy

Employee Ownership

As an Employee Ownership Trust we embrace the three pillars of good communication, governance and leadership, putting our people first.

Learn more about us

We will be by your side

Staying at the forefront of industry, we embrace and drive change, delivering solutions at pace and scale to meet the modern challenges of energy and sustainability.

Meet our people