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Energy Wholesale Market Review, 13 November 2020

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The majority of power and gas contracts increased this week. The day-ahead contracts were an exception with day-ahead gas slipping 0.9% to 37.00p/th. The contract hovered around the 37.00p/th mark for much of the week, with a drop in gas-for-power demand amid high levels of wind generation providing a ceiling for prices. Day-ahead power dropped 17.2% to £37.00/MWh. The contract decreased throughout the week with consistently strong wind generation and forecasts for this to continue into the first half of next week seeing the contract end the week over £10.00/MWh lower than it started. In contrast, all seasonal gas contracts moved higher, up by 1.2% on average. The summer and winter 21 contracts increased 1.1% to 34.37p/th and 42.40p/th, respectively. Most seasonal power contracts increased, rising 1.1% on average. Summer 21 power climbed 1.2% to £43.66/MWh and the winter 21 contract gained 1.7% to £49.76/MWh. Brent crude oil jumped 8.5% to average $43.16/bl, this week, reaching a two-month high of $45.21/bl on 11 November. API 2 coal gained 2.8% to average $55.75/t, hitting a four-week high of $59.80/t on Friday. EU ETS carbon climbed 7.4% to average €26.23/t, this week. Like the other commodity markets, carbon prices rose to a milestone high, reaching a one-month high of €26.74/t on Wednesday 11 November.

Baseload electricity
Day-ahead power dropped 17.0% to £37.00/MWh amid consistently strong wind generation throughout the week. December 20 power edged 0.1% higher to £47.5/MWh and January 21 power slipped 0.3% to £52.88/MWh.		Q121 power lifted 0.6% to £49.90/MWh. The annual April 21 contract rose 1.5% to £46.71/MWh, 0.8% lower than the same time last year (£47.08/MWh).
Forward curve comparison		Annual October Contract
Peak electricity
Day-ahead peak power lost 2.0% to £48.50/MWh, following its baseload counterpart lower. December 20 peak power declined 2.7% to £52.80/MWh, and January 21 peak power decreased 1.8% to £57.45/MWh.		The annual April 21 peak power contract lost 0.5% to £51.85/MWh. This is 3.1% lower than the same time last year (£53.52/MWh).
Forward curve comparison		Annual October contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
Seasonal power contracts rose by 1.1%, on average. Summer 21 power climbed 1.2% to £43.66/MWh and the winter 21 contract gained 1.7% to £49.76/MWh.		Seasonal peak power contracts slipped by 0.1%, on average. Summer 21 peak power fell 0.8% to £47.51/MWh and the winter 21 contract dropped 0.2% to £56.18/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude oil jumped 8.5% to average $43.16/bl, this week, reaching a two-month high of $45.21/bl on 11 November. Oil prices jumped on the news that the COVID-19 vaccine being developed by Pfizer and BioNTech showed a 90% effectiveness rate, rising above $45.0/bl. Comments from Algeria’s energy minister suggesting that OPEC+ could extend or further deepen current production cuts also provided support to oil prices. However, towards the end of the week some of these gains were reversed, as global infections continued to rise, and tighter restrictions re-imposed in numerous countries. API 2 coal gained 2.8% to average $55.75/t, hitting a four-week high of $59.80/t on Friday.		EU ETS carbon climbed 7.4% to average €26.23/t, last week. Like the other commodity markets, carbon prices rose to a milestone high, reaching a one-month high of €26.74/t on Wednesday 11 November. Carbon prices found support from the news of a successful COVID-19 vaccine and signs of power demand recovery, with E.ON’s Q3 quarterly results showing demand in its EU markets had risen to the same level as Q319.
Wholesale price snapshot