Energy Wholesale Market Review – 8 September 2023


Wholesale gas contracts experienced mixed price movements this week, whereas all tracked power contracts, with day-ahead and October 23 baseload the exception, registered week-on-week price losses. Subsequently, day-ahead gas rose 8.7% to 87.00p/th, in anticipation of supply reduction due to planned industrial action at Chevron’s Australian LNG facilities, in tandem with reduced Norwegian exports following extended maintenance at the Troll gas field. Similarly, day-ahead power rose 9.5% to £92.00/MWh, with upward price movement attributed, in part, to lower wind outturn during the week, and gains across its gas counterpart. Unlike the day-ahead baseload power contract, the front month contracts experienced bearish sentiment – with October 23 remaining level at £86.00/MWh, and November 23 power decreasing 2.7% to £108.00/MWh. Similar downward price movements were seen across all seasonal power contracts, falling on average by 2.7%, with winter 23 down 3.0% to £114.50/MWh and the summer 24 contract dropping 2.6% to £111.00/MWh. Likewise, most individual seasonal gas contracts decreased this week, however seasonal gas contracts recorded an overall gain – up by 0.4% on average. Both summer 24 and winter 24 gas dropped 0.2% and 0.9% respectively, subsiding to 128.50p/th and 143.75p/th – whereas summer 25 rose 2.6% to 114.90p/th.

Baseload electricity

Forward curve comparison

  • Day-ahead power rose 9.5% to £92.00/MWh, following its gas counterpart higher, however, further gains were mitigated by increased wind outturn projections
  • October 23 power remained level at £86.00/MWh and November 23 power decreased 2.7% to £108.00/MWh

Annual October contract

  • Q423 power moved 2.8% lower to £104.00/MWh
  • The annual October 23 contract lost 2.8% to £112.75/MWh, 63.9% lower than the same time last year (£312.50/MWh).

Peak electricity

Forward curve comparison

  • Day-ahead peak power was down 3.2% to £84.00/MWh, opposing its baseload counterpart
  • October 23 peak power declined 5.5% at £90.84/MWh, and November 23 peak power decreased 12.1% to £127.04/MWh.

Annual October contract

  • The annual October 23 peak power rose 3.6% to £126.75/MWh
  • This is 71.2% lower than the same time last year (440.50/MWh)

Seasonal power prices

Seasonal baseload power contracts

  • All seasonal power contracts declined this week, down on average by 2.7%.
  • Winter 23 power decreased 3.0% to £114.50/MWh, while summer 24 fell 2.6% to £111.00/MWh

Seasonal peak power curve

  • All Seasonal peak power contracts declined this week, down 3.5% on average.
  • Winter 23 and summer 24 peak power dropped 4.9% and 2.1% respectively, falling to £136.00/MWh and £117.50/MWh

Commodity price movements

Oil and coal

  • Brent crude prices experienced another bullish week, with an increase of 3.7% to average $89.38/bl
  • Saudi Arabia extended its cut of one million barrels per day for another three months, and Russia will continue its reduction in oil exports of 300,000 barrels per day until the end of the year
  • This bullish sentiment was further helped by news from the U.S. Energy Information Administration, which showed U.S. crude inventories fell by 6.3mn barrels in the week ending 01 September
  • However, gains were capped amid concerns over post-pandemic recovery in China – coupled with a weakened economic outlook, according to some economists. We also acknowledge that China is one of the largest importers of crude oil globally
  • Oil prices are expected to trend in a bullish direction after the supply cuts from OPEC+, with Goldman Sachs predicting oil prices to hit $100/bl by the end of 2024

Carbon (UK and EU ETS)

  • As the trend of decreasing prices continues, both ETS schemes registered losses week-on-week as the EU ETS fell 2.5% to average €84.13/t, and the UK ETS dropped 7.9% down to £43.68/t
  • Prices dropped this week, with conflicting sentiments around a scheduled strike at LNG plants in Australia impacting gas prices following a 24-hour delay on 7 September.
  • The EU ETS recorded a price of €84.05/t on 07 September – the lowest in a month
  • Losses were limited by periods of reduced wind generation however, acting to tighten system margins and increase reliance on more expensive forms of power generation such as gas-fired assets
  • As we progress further into the autumn season, and temperatures get colder, auction demand will likely see an increase, which could contribute to higher carbon prices

Wholesale price snapshot – Friday-on Friday

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