Energy Wholesale Market Review, 12 February 2021

• Day-ahead power fell 7.4% to £57.4/MWh, following the gas curve lower and weighed upon by stronger wind generation at the week’s end.
• March 21 power slipped 6.1% at £55.4/MWh and April 21 power decreased 1.8% to £54.75/MWh.

• Q221 power moved 4.6% lower to £53.74/MWh.
• The annual April 21 contract lost 2.0% to £56.02/MWh, which was 31.2% higher than the same time last year (£42.7/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was down 6.6% to £63.50/MWh, following its baseload counterpart lower.
• March 21 peak power declined 1.1% at £62.11/MWh, and April 21 peak power decreased 2.0% to £58.74/MWh.

• The annual April 21 peak power contract lost 1.5% to £63.08/MWh.
• This is 29.8% lower than the same time last year (48.6/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal power contracts declined this week, down on average by 0.2%.
• Summer 21 power decreased 2.0% to £52.43/MWh, while winter 21 fell 2.0% to £59.60/MWh.

• In contrast, all seasonal peak power contracts boosted this week, up 1.7% on average.
• Summer 21 and winter 21 peak power increased 1.4% and 1.6% respectively, up to £57.05/MWh and £69.10/MWh.

Oil and Coal

Carbon

• Brent crude oil rose again this week, up 5.3% to average $60.82/bl.
• The Brent crude price reached fresh highs this week, breaking yearly highs on consecutive days, the first being on Monday 8 February reaching $60.10bl. Over the following two days the price rose a further $1.45/bl to reach its weekly and new yearly high of $61.55/bl.
• The oil market continues to prosper in the wake of the global vaccination roll-out, in the hope this will alleviate concern in the market surrounding demand recovery.
• API 2 coal rose 1.3% from the previous week to average $67.18/t.

• EU ETS carbon prices grew this week, rising 8.6% to average €38.52/t. Prices hit an all-time high of €39.46/t on Thursday, buoyed by investor speculation on future price trajectory as well as the cold-snap across the UK and parts of Europe last week.
• Developments were also made in the newly established UK ETS. On 11 February, government announced in an update to its guidance, Participating in the UK ETS, that the transactional auction reserve price of will rise £22/t (from £16/t), establishing a new minimum price for when auction commence.
• The update confirms that it will not change this reserve price until it is ultimately removed as the market matures.

Wholesale price snapshot