Energy Wholesale Market Review, 10 July 2020

• Day-ahead power rose 18.3% to £30.75/MWh, following a steady rise in demand, coupled with periods of low wind generation.
• August 20 power climbed 0.3% at £32.2/MWh and September 20 power decreased 0.6% to £34.79/MWh.

• Q420 power moved 2.2% higher to £44.01/MWh.
• The Annual October 20 contract rose 2.3% to £44.25/MWh, 19.1% lower than the same time last year (£54.69/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was down 0.8% to £32.5/MWh.
• August 20 peak power gained 0.9% at £36.89/MWh, and September 20 peak power increased 0.8% to £40.03/MWh.

• The annual October 20 peak power lost 1.5% to £50.37/MWh.
• This is 17.8% lower than the same time last year (61.31/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts boosted this week, up on average by 2.4%.
• Winter 20 and summer 21 expanded 2.8% and 1.8% respectively, rising to £46.5/MWh and £42/MWh.

• Seasonal peak power contracts rose higher this week, up 2.1% on average.
• Winter 20 and summer 21 peak power increased 1.0% and 2.2% respectively, falling to £54.35/MWh and £46.39/MWh.

Oil and Coal

Carbon

• Brent crude oil experienced growth this week, rising 2.0% to average $42.7/bl, up from $41.9/bl the previous week. Oil prices started the week at $43.37/bl, though settled lower at the end of the week at $41.44/bl.
• Tighter supplies helped to support prices at the start of the week, despite news of fresh COVID-19 cases being detected across a number of countries. The US rig count fell by three rigs early in the week, dipping down to total 185.
• However, growth has been pegged back by fears that new COVID-19 cases could led to fresh lockdown measures, which would overall halt demand recovery.
• API 2 coal prices extended upon the previous week’s growth, rising 0.5% to average $58.1/t.

• EU ETS carbon prices increased week-on-week, growing 8.0% this week to average €28.7/t. On 7 July, carbon prices reached €29.4/t, a near 12-month high, amid strong speculator-driven trading activity, despite weak fundamentals
• Market prices were supported mid-week as the European Parliament’s environment committee adopted a report to extend the scope of the EU ETS to the shipping sector. This signalled the prospect of increased future demand for EUAs.

Wholesale price snapshot