Energy Wholesale Market Review, 14 June 2019

Baseload electricity

• Day-ahead power was unchanged from the previous week at £39.3/MWh. The contract is 27% lower than the same time last year (£53.8/MWh).
• Month-ahead power slipped 0.1%, ending the week at £39.0/MWh.

• Annual October 19 power was down 0.3% week-on-week at £51.6/MWh.
• The contract is 3.0% lower than the same time last month (£53.2/MWh), but 4.1% higher than the same time last year (£49.6/MWh).

Forward curve comparison

Annual October Contract

Peak electricity

• Day-ahead peak power fell 2.7% to £41.9/MWh, £2.6/MWh above its baseload counterpart.
• Day-ahead peak power is 26.3% lower than the same time last year when it was £56.8/MWh.
• July 19 peak power slipped 0.3% to end the week at £42.6/MWh.

• Annual October 19 peak power was up slightly, lifting 0.1% to end the week at £57.6/MWh, £6.0/MWh above its baseload power counterpart.
• The contract is 2.5% below its value this time last month (£59.1/MWh), but 3.6% below the same time last year when it was £55.6/MWh.

Forward curve comparison

Annual October contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts moved lower, falling 0.3% on average.
• Winter 19 power declined 0.5% to £55.5/MWh at the end of the week. The contract is 2.0% higher than the same time last year (£54.4/MWh).
  

• Seasonal peak power contracts gained 0.2% on average, as summer 21 rose 1.1% to £51.8/MWh.
• Both winter 19 and 20 peak power fell, down 0.2% and 0.7% to £62.9/MWh and £62.9/MWh respectively.
  

Commodity price movements

Oil and Coal

Carbon

• Brent crude oil rose for the first time in four weeks, up by only 0.3% to average $61.8/bl.
• Brent crude oil prices dropped as low as $59.6/bl on 12 June, pressured by reports of another weekly rise in US crude stocks the previous week. However, prices soon recovered, going above $62.5/bl, following reports of attacks on two oil tankers in the Gulf of Oman. The US government has since blamed Iran for the attacks, claims which Iran has called “unfounded”.
• API 2 coal prices were unchanged, averaging $64.2/t. Demand for coal in Europe remains relatively low, with total coal imports into Europe at 49mt between January-May, down 10% year-on-year. Coal imports have been lower due to milder weather, high coal inventories at ARA terminals (stocks ended May at 6.6mt), and high LNG send-out driving gas prices lower.

• EU ETS carbon prices reversed the previous week’s decline, lifting 3.3% to average €25.0/t.
• Carbon prices were supported by a drop in auction volumes this week following a public holiday on Monday, and a lack of a bi-weekly Polish auction on Wednesday, meaning only 8.8mt of EUAs were available.
• Uncertainties around Brexit continues to pressure prices, as MPs rejected plans from Labout for a no-deal vote, which hoped to stop the UK leaving the EU without any agreement on 31 October.