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Energy Wholesale Market Review, 11 December 2020

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Most power and gas contracts rose this week, with exceptions being in both day-ahead peak and baseload power contracts. Day-ahead gas rose marginally, lifting 0.1% to 42.55p/th, despite gradually increasing temperatures throughout the week, correlated with periods of system oversupply. Conversely, day-ahead power fell significantly, falling 59.0% to £45.15/MWh, reflecting a period of notably high prices from the week prior, following price spikes from tight supply margins and corelated low wind output. However the day-ahead baseload power contract was weighed upon by periods of increased wind generation and wavering demand throughout this week. All seasonal gas contracts rose this week, up by 4.4% on average, while both summer 21 and winter 21 gas increased 7.7% and 5.3% respectively, lifting to 35.91p/th and 44.37p/th. All seasonal power contracts boosted this week, up on average by 2.6%, as summer 21 and winter 21 expanded 4.6% and 3.5% respectively, rising to £46.50/MWh and £52.60/MWh. Brent crude oil climbed for the fifth consecutive week, lifting 2.7% higher from the previous week to average $49.26/bl. Oil prices continued to rally on COVID-19 vaccination developments, creating a more positive demand outlook whilst also supported by global equity markets. EU ETS carbon climbed for the fifth consecutive week in parallel, rising 2.8% to average €30.03/t this week. Prices broke the €30.00/t mark across 9th to 11th December. Carbon prices benefitted largely from EU leaders reaching a deal on more ambitious and robust emissions cuts.

Baseload electricity
Day-ahead power fell 59.0% to £45.15/MWh, following price spikes this week. Prices were predominately weighed upon by increased wind generation and wavering demand throughout this week. January 21 power climbed 2.7% at £57/MWh and February 21 power increased 4.4% to £59.22/MWh.		Q121 power moved 1.3% higher to £54.8/MWh. The annual April 21 contract rose 4.0% to £49.55/MWh, 7.7% higher than the same time last year (£46.01/MWh).
Forward curve comparison		Annual April Contract
Peak electricity
Day-ahead peak power was down 68.9% to £54.35/MWh, following its baseload counterpart lower. January 21 peak power gained 6.2% at £68.02/MWh, and February 21 peak power increased 7.9% to £67.65/MWh.		The annual April 21 peak power lost 4.0% to £54.82/MWh. This is 4.8% lower than the same time last year (52.3/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts boosted this week, up on average by 2.6%. Summer 21 and winter 21 expanded 4.6% and 3.5% respectively, rising to £46.50/MWh and £52.60/MWh.		All seasonal peak power contracts boosted this week, up 3.6% on average. Summer 21 and winter 21 peak power increased 4.2% and 3.8% respectively, falling to £50.25/MWh and £59.39/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil climbed for the fifth consecutive week, lifting 2.7% higher from the previous week to average $49.26/bl. Oil prices continued to rally on COVID-19 vaccination developments, creating a more positive demand outlook whilst also supported by global equity markets. The first roll-out of vaccinations, to the general public, have acted to ease markets fears with concerns over lack of demand post-COVID. It is hoped a successful vaccination roll-out, will allow many countries to kick-start their economies and exit strict lockdown measures which has historically acted to stifle demand in many recent months. API 2 coal gained 3.4% from the previous week to average $63.70/t.		EU ETS carbon climbed for the fifth consecutive week, rising 2.8% to average €30.03/t this week. Prices broke the €30.00/t mark across 9, 10 and 11 December. Carbon prices benefitted largely from EU leaders reaching a deal on more ambitious and robust emissions cuts, aiming to reduce carbon emissions by 55% by 2030. Carbon prices like many commodity markets continue to find support from positive COVID-19 vaccination developments and the roll-out of vaccinations to the general public, easing demand fears.
Wholesale price snapshot