Energy Wholesale Market Review, 16 November 2018

Baseload electricity

• Day-ahead power rose 14.7% to an eight-week high of £70.3/MWh, following gas prices higher.
• December 18 and January 19 power rose 9.7% and 7.7% to £69.8/MWh and £70.0/MWh respectively.

• Annual April 19 power gained 3.8% to £60.9/MWh.
• The contract is 0.8% above the same time last month when it was £60.4/MWh, and 36.8% than during the same period last year (£44.5/MWh).

Forward curve comparison

Annual October Contract

Peak electricity

• Day-ahead peak power gained 11.3% week-on-week to £73.0/MWh. This was £3.0/MWh above its baseload counterpart.
• Month-ahead peak power went up 9.7% to end the week at £77.1/MWh, £7.3/MWh above its baseload counterpart.

• Week-on-week, annual April 19 peak power went up 3.3% to £66.6/MWh. The contract was £5.7/MWh above its baseload power counterpart.
• The contract was 0.7% above its price last month (£66.1/MWh) and 32.1% higher than its value last year (£50.4/MWh).

Forward curve comparison

Annual October Contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal baseload power contracts increased 2.5% on average.
• Summer and winter 19 power went up 4.7% and 3.0% to £58.2/MWh and £63.7/MWh respectively.

• All seasonal peak power contracts increased this week, up 2.3% on average.
• Prices followed their gas counterparts, with seasonal gas contracts 2.4% higher on average.

Commodity price movements

Oil and Coal

Carbon

• The weekly average Brent crude oil price fell for a sixth week, dropping 5.8% to average $67.9/bl, down from $72.1/bl the previous week.
• Within-day oil prices dropped to an eight-month low of $64.8/bl on 13 November, amid concern of an oversupplied market in 2019.
• Brent crude oil prices plummeted following concerns of oversupply as US crude production is at a record high of 11.6mn bpd and US crude stocks hit 442.1mn barrels.
• API 2 coal prices dropped 2.8% to average $87.8/t, down from $90.3/t the previous week.
• Prices fell to a 16-week low of $86.0/t on 15 November, as China stop all seaborne thermal coal imports for the remainder of the year.

• EU ETS carbon prices continued to recover, up 7.9% to average €19.6/t.
• Prices have recovered with the upcoming Market Stability Reserve that will remove surplus allowances from January 2019. The cancellation of German auctions reducing EUA volumes.
• Prices could also find support from below seasonal normal temperatures across Europe in the coming weeks, which may increase coal fired-power generation and push up demand for EUAs.

Wholesale price snapshot