Energy Wholesale Market Review, 15 March 2019

• Day-ahead power was down 1.0% at £47.5/MWh.
• The contract fell to £43.4/MWh on 14 March, an 18-month low, amid forecasts of higher wind generation.
• April and May 19 power went down 5.4% and 6.2% to £45.1/MWh and £44.3/MWh, respectively.

• Annual April-19 power was 5.3% lower week-on-week, falling to £50.3/MWh.
• The contract is 6.6% below the same time last month (£53.8/MWh), but 14.8% above the same time last year when it was £43.8/MWh.

Forward curve comparison

Annual April Contract

Peak electricity

• Day-ahead peak power slipped 2.9% to £49.5/MWh, just £2.0/MWh above its baseload counterpart.
• Day-ahead peak power is 30.3% lower than the same time last year when it was £71.0/MWh.
• April and May 19 peak power lost 5.0% and 5.6% to £47.6/MWh and £47.7/MWh, respectively.

• Annual April 19 peak power dropped 4.9% to £55.6/MWh, remaining £5.3/MWh above its baseload power counterpart.
• The contract was 6.3% below its price last month (£59.3/MWh), but 14.0% higher than its value last year (£48.8/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts continued to fall further, dropping 4.2% on average.
• Summer and winter 19 power fell to £45.5/MWh and £55.0/MWh, respectively.

• All seasonal peak power contracts went down this week, dropping by 4.2% on average.
• The summer 19 peak contract was 5.4% lower at £49.2/MWh, £3.7/MWh above its baseload power counterpart.

Commodity price movements

Oil and Coal 

Carbon

• • Brent crude oil prices rose this week, up 1.8% to average $66.9/bl.
  • Within-day oil prices rose to a fresh four-month high above $68.0/bl on 14 March, supported by concerns of tighter global supply.
  • OPEC’s Monthly Oil Market Report suggests that the group could extend production cuts beyond June as demand is forecast lower than previously expected whilst growth in non-OPEC production is expected to rise.
  • API 2 coal prices fell 3.7% to average $75.8/t.
  • Milder temperatures in the northern hemisphere, combined with higher wind generation in Europe, has pushed conventional-fired power generation off the system, lowering demand for coal and pressuring API 2 coal prices further.

• EU ETS carbon prices slipped 1.1% to average €22.5/t.
• Carbon prices found some support this week after parliament voted against the prospect of a ‘no-deal’ Brexit.
• However, prices remain pressured by Brexit uncertainty, and by warmer temperatures easing conventional-fired power generation demand as gas prices fall further amid comfortable gas supplies.

Wholesale price snapshot