Energy Wholesale Market Review, 15 October 2021

Headlines

The higher wholesale price benchmarks set across the last month continued again this week, albeit showed signs of softening from the recent spell of strong day-on-day price volatility. Day-ahead gas slipped 1.7% to 226.00p/th, following a more comfortable supply picture through both higher domestic and Norwegian supply volumes. Day-ahead power fell 6.1% to £200.00/MWh, with stronger wind generation seen broadly throughout the week, combined with softening demand in parallel. November 21 gas was down 3.4% at 247.62p/th, and December 21 gas decreased 3.3% to 255.66p/th. Most seasonal gas contracts increased this week, up by 5.9% on average. Summer 22 and winter 22 gas gained 10.6% and 9.8% respectively, lifting to 109.85p/th and 112.85p/th. Most seasonal power contracts rose this week, up on average by 0.1%, as summer 22 and winter 22 climbed 8.1% and 6.4% to £114.04/MWh and £117.00/MWh, respectively.

Baseload electricity
  • Day-ahead power fell 6.1% to £200.00/MWh, following periods of lower demand and higher wind outturn.
  • November 21 power slipped 1.6% to.00 £250.97/MWh and December 21 power increased 3.0% to £257.50/MWh.
  • Q122 power moved 5.0% lower to £247.00/MWh.
  • The annual April 22 contract rose 7.2% to £115.52/MWh, 146.2% higher than the same time last year (£46.93/MWh).
Forward Curve Comparison

 

Annual April Contract

Peak electricity
  • Day-ahead peak power was down 10.6% to £210.00/MWh, following its baseload counterpart lower.
  • November 21 peak power gained 3.3% to £315.00/MWh, and December 21 peak power increased 5.0% to £314.00/MWh.
  • The annual April 22 peak power rose 2.4% to £139.25/MWh
  • This is 162.5% higher than the same time last year (£53.05/MWh).

Forward curve comparison

 

Annual April contract

 

Seasonal power prices

Seasonal baseload power contracts

 

Seasonal baseload power curve

 

  • Most seasonal power contracts lifted this week, up on average by 0.1%.
  • Summer 22 and winter 22 rose 8.1% and 6.4% respectively, to £114.04/MWh and £117.00/MWh.
  • Most seasonal peak power contracts increased this week, up 1.4% on average.
  • Summer 22 peak power climbed 5.5% to £125.50/MWh, while winter 22 peak power remained at £153.00/MWh.
Commodity price movements

Oil and Coal

 

Carbon

  • Brent crude prices rose again this week, up 3.4% to $83.95/bl. Prices also reached a fresh three-year high on 15 October, at $84.74/bl.
  • The global picture of Brent crude remains tight. Higher demand profiles across many global markets with less supply has provided a strong undercurrent of support to price over the best part of a month.
  • The underlying tight supply outlook has still not persuaded OPEC+ to increase supply to satisfy heightened demand in the market, continuing to support higher prices.
  • The strong bullish sentiment for carbon markets subsided again this week, albeit both the UK and EU ETS remain at heightened price points by comparison to earlier this year.
  • Subsequently, the UK ETS fell 1.8% to £64.90/t with the EU ETS dropping 3.4% to €59.90/t.
  • Wider bullishness from Brent crude markets did lend some support to carbon markets in part, but was offset by what continues to be a particularly volatile period for wholesale markets.
Wholesale price snapshot 

 

Posted by TEAM on 15 October 2021
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