Energy Wholesale Market Review, 13 September 2019

• Day-ahead power jumped 13.0% to £41.8/MWh, a seven-week high.
• Month-ahead power gained 15.0% to £47.0/MWh and November 19 power rose 10.8% to £54.7/MWh.

• Q419 power climbed 11.6% to £52.9/MWh.
• The annual October 19 power contract increased 7.% to end the week at £52.3/MWh.

Forward curve comparison

Annual October Contract

• Day-ahead peak power rose 8.1% to £44.9/MWh.
• October 19 peak power gained 13.0% to £51.8/MWh.
• November 19 peak power fell 10.5% to £63.0/MWh.

• Annual October 19 peak power was 7.2% higher at £57.9/MWh, £5.6/MWh above its baseload power counterpart.
• The contract is 1.9% above its value this time last month (£56.8/MWh), but 9.6% below the same time last year when it was £64.0/MWh.

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Significant rises were also seen in the seasonal contracts with winter 19 power gaining 9.7% to £55.5/MWh and the summer 20 contract lifting 5.8% to £49.2/MWh.

• Seasonal peak power contracts were 2.5% lower on average.
• Winter 19 peak power decreased 3.6% to £57.1/MWh.

Oil and Coal

Carbon

• Brent crude oil gained 3.9% to average $61.7/bl.
• On 12 September, OPEC announced that it agreed to reduce output by placing obligations on Iraq and Nigeria to decrease their production in line with agreed cuts.
• Prices were also supported by the naming Saudi Arabia’s new Energy Minister who is expected to push for greater production cuts to counter a slowdown in oil demand growth.
• API 2 coal prices rose 5.2% to average $67.6/t. Prices were supported by a continued decline in coal stocks in India, pointing towards increased demand in the coming weeks and months. In addition, Chinese customs data showed an 11% increase in coal imports year-to-date compared to 2018 as a result of low stocks in key ports in the north of the country.

• EU ETS carbon lifted 2.8% to average €26.1/t.
• The main upward drivers were concerns surrounding the French nuclear fleet, the ECJ ruling on Gazprom’s use of the Opal pipeline and the announced closure of the Groningen gas field.
• It was also announced that the linking of the Swiss and EU ETS schemes is on track for January 2020, although there is the possibility of a delay in connecting the registers of the two schemes.

Wholesale price snaphot