Energy Wholesale Market Review, 11 December 2020

• 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

• 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 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.

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