Energy Wholesale Market Review, 17 December 2021

• Day-ahead power rose 68.1% to £400.00/MWh, following strong near-term gains in gas markets, exacerbated by low wind output during the week.
• January 22 power climbed 45.5% to £480.00/MWh and February 22 power rose 50.7% to £440/MWh.

• Q122 power moved 43.8% higher to £405.56/MWh.
• The annual April 22 contract increased 20.1% to £188.50/MWh, 286.0% higher than the same time last year (£48.83/MWh), and 67.4% higher than the same time last month (£112.62/MWh).

Annual April Contract

• Day-ahead peak power was up 75.0% at £525.00/MWh, following its baseload counterpart higher.
• January 22 peak power gained 61.8% to £825.00/MWh, and February 22 peak power increased 84.9% to £675.00/MWh.

• This week, the annual April 22 peak power contract rose 8.8% to £200.25/MWh
• This is 264.0% higher than the same time last year (55.01/MWh), and 58.3% higher than the same time last month (£126.50/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts boosted this week, up on average by 11.0%.
• Summer 22 and winter 22 contracts went up 18.8% and 21.3% respectively, rising to £183.00/MWh and £194.00/MWh.

• Despite gains in nearer-term seasonal peak power contracts, seasonal peak power contracts were down 8.7% on average this week.
• Summer 22 and winter 22 peak power increased 6.0% and 11.2% respectively, rising to £181.50/MWh and £219.00/MWh.

Oil and Coal

Carbon

• Brent crude prices fell marginally from the week prior to average $74.19/bl.
• This week, prices continued to be weighed on by developments related to the Covid-19 Omicron variant, with more substantial lockdown measures emerging across much of Europe and further afield.
• It is feared that demand could suffer as a consequence of renewed lockdown measures, and this has ultimately weighed on prices in the week.
• There are also reports that supply could outstrip demand next year based on current trends.

• Carbon prices saw mixed movements this week, with the UK ETS rising 4.0% to average £75.29/t, whereas the EU ETS fell, down 2.7% to average €80.68/t.
• For UK ETS prices, news from the UK ETS authority on 14 December that they would not be intervening with the scheme despite the December trigger price being met under the Cost Containment mechanism (CCM) allowed prices to climb further into the weeks end.
• EU ETS prices were dented by news a sell-off in EUA futures following Wednesday’s option expiry.

Wholesale price snapshot