Energy Wholesale Market Review, 1 May 2020

• Day-ahead power fell 1.4% to £25.25/MWh on a rise in wind generation towards the end of the week.
• June 20 power slipped 0.5% at £25.85/MWh and July 20 power decreased 12.1% to £24.40/MWh.

• Q320 power moved 1.4% lower to £29.10/MWh
• The Annual October 20 contract lost 1.2% to £38.23/MWh, 24.5% lower than the same time last year (£50.61/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power followed its baseload counterpart down, falling 2.2% to £26.50/MWh.
• June 20 peak power declined 0.9% at £29.12/MWh, and July 20 peak power decreased 1.9% to £30.98/MWh.

• The Annual October 20 peak power lost 1.9% to 43.45/MWh.
• This is 23.9% lower than. the same time last year (57.08/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined this week, down on average by 1.7%.
• Winter 20 power decreased 1.0% to £40.60/MWh, while summer 21 fell 1.5% to £35.85/MWh.

• All seasonal peak power contracts declined this week, down 2.0% on average.
• Winter 20 and summer 21 peak power dropped 1.1% and 2.8% respectively, falling to £46.92/MWh and £39.97/MWh.

Oil and Coal

Carbon

• Brent crude oil prices rose 2.1% to average $22.35/bl this week, as the ease of lockdown restrictions in several countries around the world and the build-up to oil production cuts in May supported prices.
• Starting the week at around $21/bl, Brent crude prices dropped back under $20/bl the following day on reports that global storage was reaching near maximum capacity.
• Prices were bolstered midweek by indications from the IEA that US crude inventories had risen by less than expected.
• Brent prices continued to rose late this week as Donald Trump threatened to revoke military support for Saudi Arabia, should they choose not to cut oil production.
• With the interests of the US shale industry, the US president told Saudi Arabian leaders: “We are defending your industry while you’re destroying ours.”

• API 2 coal saw losses this week, falling 2.8% to average $52.60/t, as demand for the commodity continues to slide.
• Coal demand has been particularly affected by the fall in LNG prices, which has seen a switch in coal to gas buying in the Asian market.
• EU ETS carbon prices did not follow oil prices last week and ultimately fell 2.6% to average €20.05/t
• Carbon prices dropped with lower demand in EUA auctions as a result of a national holiday across most of Europe on 1 May.

Wholesale price snapshot