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Energy Wholesale Market Review, 10 September 2021

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Despite some Friday-on-Friday downward movements in day-ahead contracts, gas and power contracts have generally held onto the significant and unseasonably highs set across recent months. In support of this, day-ahead gas rose 4.3% to 138.75p/th, aided by periods of system undersupply and lowering wind output calling for higher gas-for-power demand. Day-ahead power fell 28.8% to £171/MWh, but remained high. Higher price points set in gas markets have supported power markets, combined with low wind outturn in the week and tighter system margins. As of 8 September, a new day-ahead baseload power record high was set, reaching £285/MWh. October 21 gas was up 6.2% at 140.93p/th, and November 21 gas increased 6.8% to 145.59p/th. All seasonal gas contracts boosted this week, up by 4.0% on average, while both winter 21 and summer 22 gas increased 7.2% and 5.4% respectively, lifting to 143.83p/th and 79.60p/th. Seasonal power contracts saw similar movements, up on average by 5.6%, as winter 21 and summer 22 expanded 8.0% and 4.4% respectively, rising to £138.00/MWh and £86.00/MWh.

Baseload electricity
Day-ahead power fell 28.8% to £171/MWh, supported by low renewables output in the week and tight system margins. October 21 power climbed 6.3% at £134/MWh and November 21 power increased 8.3% to £143/MWh.		Q421 power moved 7.7% higher to £139.5/MWh. The annual October 21 contract rose 6.6% to £112/MWh, 133.9% higher than the same time last year (£47.88/MWh).
Forward Curve Comparison		Annual October Contract
Peak electricity
Day-ahead peak power was down 33.4% to £203.00/MWh, following its baseload counterpart lower. October 21 peak power gained 6.2% at £139.5/MWh, and November 21 peak power increased 9.0% to £165.19/MWh.		The annual October 21 peak power rose 13.5% to £129.5/MWh This is 143.3% higher than the same time last year (53.23/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts boosted this week, up on average by 5.6%. Winter 21 and summer 22 expanded 8.0% and 4.4% respectively, rising to £138.00/MWh and £86.00/MWh.		Most seasonal peak power contracts saw gains this week, up 12.7% on average. Winter 21 and summer 22 peak power increased 13.2% and 14.0% respectively, falling to £161.00/MWh and £98.00/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude prices fell for the first time in three weeks, albeit marginally, down 0.4% from the week prior to $72.16/bl. Despite prices retreating slightly this week, the Brent crude market continues to hold onto strong price points set in recent months, well above prices seen the same time a year ago (128% higher) Bearish price movements this week were primarily driven by news earlier in the week Saudi Arabia cut contract prices with Asian markets over the prior weekend, weakening prices in the market as a result.		The UK ETS rose 3.4% to average £53.73/t this week, reaching a record high of £54.10/t on 6 September. The EU ETS saw similar gains, up 3.4% to average €62.42/t. Gains in both schemes were underpinned by record high gas prices. European gas storage levels remain notably low, and with winter fast approaching, supply concerns for the winter season continue. The return of higher auction volumes as we progress through September may see prices begin to retreat slightly in the coming weeks.
Wholesale price snapshot