Energy Wholesale Market Review, 1 April 2022

Headlines

The majority of power and gas contracts increased this week. Day-ahead gas climbed 16.0% to 298.00p/th, supported by colder temperatures and an undersupplied gas system towards the end of the week. The new month-ahead contract (May 2022) gained 11.3% to 298.23p/th and June 2022 gas jumped 23.4% to 301.93p/th. Seasonal gas contracts moved 2.7% higher on average. Winter 22 gas saw the greatest movements, rising 11.8% to 297.50p/th. In contrast, summer 23 gas lost 4.8% to 149.40p/th. Day-ahead power surged 21.9% to £245.00/MWh, driven higher by rising gas prices and decreasing wind generation. Month-ahead power lifted 7.1% to £249.00/MWh and June 22 power leapt 19.2% to £253.00/MWh. Seasonal power contracts climbed 8.9% on average, with summer 22 power jumping 16.6% to £260.00/MWh. Meanwhile, summer 23 power rose 3.7% to £140.00/MWh. Brent crude oil fell 4.9% to average $111.04/bl, pressured by the potential release of oil from the US Strategic Reserve and rising OPEC+ supply. EU ETS carbon lifted 0.3% to average €79.24/t, while UK ETS slipped 1.1% to average £76.35/t.

Baseload electricity
  • Day-ahead power gained 21.9% to £245.00/MWh, supported by higher gas prices and falling wind generation towards the end of the week.
  • May 22 power lifted 7.1% to £249.00/MWh and June 22 power climbed 19.2% to £253.00/MWh.
  • Q3-22 power rose 18.3% to £260.00/MWh.
  • The annual October 22 contract jumped 11.7% to £200.00/MWh, 275.8% higher than the same time last year (£53.22/MWh).
Forward Curve Comparison

 

Annual April Contract

Peak electricity
  • Day-ahead peak power rose 10.9% to £255.00/MWh, following baseload power higher.
  • May 22 peak power gained 8.2% to £264.96/MWh and June 22 peak power jumped 17.4% to £268.16/MWh.
  • The annual October 22 peak power was unchanged at £229.72/MWh
  • This is 285.8% higher than the same time last year (£59.54/MWh).

Forward curve comparison

 

Annual April contract

 

Seasonal power prices

Seasonal baseload power contracts

 

 

Seasonal baseload power curve

 

 

  • All seasonal power contracts increased this week, up by 11.7% on average.
  • Winter 22 power leapt 16.6% to £260.00/MWh, while summer 23 power edged 3.7% higher to £140.00/MWh.
  • Seasonal peak power contracts were little changed this week.
  • Winter 22 peak power was unchanged at £317.43/MWh, while the winter 23 contract lifted 1.9% to £185.00/MWh..
Commodity price movements
 

Oil and Coal

 

Carbon

  • Brent crude oil fell 4.9% to average $111.04/bl, this week.
  • Prices were pressured by the potential release of 180mn oil from the US Strategic Reserve, which would mark the largest release in its history.
  • In addition, the OPEC+ decision to stick to a previously agreed 432,000 barrel per day production increase from May added further downward pressure to prices.
  • Carbon markets saw mixed movements from the previous week. UK ETS carbon lost 1.1% to average £76.35/t, while EU ETS carbon lifted 0.3% to average €79.24/t.
  • EU ETS prices found support from colder temperatures, although price gains were capped by weak auction results on Friday.
Wholesale price snapshot 

 

Posted by TEAM on 4 April 2022