Energy Wholesale Market Review, 1 March 2019

Baseload electricity

• Day-ahead power fell 2.2% to £48.0/MWh. The contract hit a fresh eight-month low of £47.3/MWh on 25 February.
• April 19 power was unchanged at £47.9/MWh, whilst May 19 power lifted 0.6% to £47.5/MWh.

• Annual April 19 power rose 1.4% to £53.5/MWh.
• The contract is 4.2% below the same time last month when it was £55.8/MWh, but 23.3% above the same time last year when it was £43.4/MWh.

Forward curve comparison

Annual April Contract

Peak electricity

• Day-ahead peak power fell 3.6% to £51.0/MWh, just £3.0/MWh above its baseload counterpart.
• Day-ahead peak power is 38.2% lower than the same time last year when it was £82.5/MWh.
• April 19 peak power slipped 0.1% to £50.6/MWh, £2.7/MWh above its baseload counterpart.

• Annual April 19 peak power increased 3.3% to £58.9/MWh, £5.4/MWh above its baseload power counterpart.
• The contract was 3.9% below its price last month (£61.2/MWh), but 22.9% higher than its value last year (£47.9/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts reversed the previous week’s losses, gaining 1.6% on average.
• Both summer and winter 19 power rose 1.4% to £48.5/MWh and £58.4/MWh, respectively.

• All seasonal peak power contracts went up this week, increasing by 1.3% on average.
• The summer 19 peak contract was 1.3% higher at £52.4/MWh, £3.9/MWh above its baseload power counterpart.

Commodity price movements

Oil and Coal 

Carbon

• • Brent crude oil slipped 1.0% to average $66.0/bl.
  • Oil prices fell from the previous week’s three-month high following tweets from US President Donald Trump, which said “Oil prices getting too high. OPEC, please relax and take it easy.”
  • Although this resulted in a downturn in oil prices, Saudi Arabian Energy Minister Khalid al-Falih responded that the group were “taking it easy” and said “the 25 countries are taking a very slow and measured approach. […] we are interested in market stability first and foremost.”
  • API 2 coal prices rose for a second consecutive week, up 1.9% to average $79.4/t.
  • Coal ended the week at a three-week high of $80.8/t.

• EU ETS carbon prices rose 1.8% to average €20.3/t.
• Within-day carbon prices had started the week at €18.5/t, the lowest since 6 December 2018, however prices recovered to end the week just below €22.0/t.
• Prices were supported last week by heavy buying from emitters ahead of the 30 April deadline to submit EUAs to cover last year’s emissions.
• Generally, carbon prices have been pressured by warmer weather reducing demand for conventional power generation, a fall in gas prices, uncertainty around the UK’s future carbon policy post-Brexit, and by news of Germany’s coal phaseout.
• As weather nears seasonal normal temperatures in March, demand for conventional power generation is expected to increase EUA buying across Europe.

Wholesale price snapshot