Energy Wholesale Market Review, 17 January 2020

• Day-ahead power rose 6.5% to £38.50/MWh, following lower wind generation near the end of the week.
• February 20 power slipped 4.1% to £38.35/MWh and March 20 power decreased 4.0% to £37.45/MWh.

• Q220 power moved 2.4% lower to £37.56/MWh.
• The Annual April 20 contract lost 3.8% to £42.04/MWh, 24.9% lower than the same time last year (£55.98/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was down 3.6% at £42.75/MWh, following baseload power higher.
• February 20 peak power declined 2.9% at £43.90/MWh, and March 20 peak power decreased 4.0% to £41.30/MWh.

• The Annual April 20 peak power lost 3.3% to 47.65/MWh.
• This is 24.2% lower than the same time last year (62.83/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined last week, down on average by 3.3%.
• Summer 20 power decreased 3.3% to £37.43/MWh, while winter 20 fell 4.2% to £46.65/MWh.

• All seasonal peak power contracts declined this week, down £3.1% on average.
• Summer 20 and winter 20 peak power dropped 3.2% and 3.4% respectively, falling to £41.40/MWh and £53.90/MWh.

Oil and Coal

Carbon

• Brent crude oil fell by 4.1% to average $64.68/bl despite recovering to above $65/bl on 17 January. Crude prices continue to decline following lowered tensions in the Middle East, where it looks as though there will be no significant disruption to Brent crude oil supply.
• With optimism about the US-China trade deal already factored into prices, minimal gains were seen when the deal was signed on 15 January. Countering this was news that China suffered its slowest economy growth in 29 years at only 6.1%.
• API 2 coal fell 2.0% to average $56.28/t as the trend of a bearish API 2 coal market continues, reversing rare gains seen last week.

• EU ETS carbon slipped 0.1% to average €24.49/t as prices fluctuated midweek on strong EUA auction turnout.
• Prices lifted late last week on news of plans by Germany to phase coal out of generation. Initially this will see demand for EUA’s rise as Germany looks to burn out the remainder of its coal inventory, though naturally this will add weight to API 2 prices from the resulting lack of future demand by Europe’s largest economy.

Wholesale price snapshot