Energy Wholesale Market Review, 17 July 2020

• Day-ahead power rose 1.6% to £31.25/MWh, having been supported by falling wind generation forecasts throughout the week.
• August 20 power slipped 5.3% at £30.5/MWh and September 20 power decreased 4.5% to £33.24/MWh.

• Q420 power moved 1.6% lower to £43.3/MWh.
• The annual October 20 contract lost 1.4% to £43.61/MWh, 17.8% lower than the same time last year (£53.07/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 1.5% to £33/MWh.
• August 20 peak power gained 0.7% at £37.14/MWh, and September 20 peak power increased 3.2% to £41.33/MWh.

• The annual October 20 peak power lost 2.3% to £49.21/MWh.
  This is 17.8% lower than the same time last year (59.86/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal power contracts declined this week, down on average by 1.2%.
• Winter 20 power decreased 1.5% to £45.81/MWh, while summer 21 fell 1.4% to £41.4/MWh.

• All seasonal peak power contracts declined this week, down 2.3% on average.
• Winter 20 and summer 21 peak power dropped 2.5% and 2.1% respectively, falling to £53.01/MWh and £45.4/MWh.

Oil and Coal

Carbon

• Brent crude oil prices held steady this week, averaging $43.01/bl.
• The markets remain uncertain over future demand for the commodity, with the fears of a second wave of coronavirus potentially limiting future growth in the oil contract.
• Minor losses were seen in Brent prices midweek following the decision by OPEC+ allies tease the productions cuts that started in May. The record 9.7mn bpd cuts will now be scaled back to 7.7mn bpd starting in August.
• Reports from OPEC saw the group envisaging global demand recovering by 7mn bpd in 2021, following the 9mn bpd drop this year as a result of the pandemic.

• EU ETS carbon prices saw volatile movement this week, reaching a 14-year high of €30.57/t on 13 July, driven by supportive changes to weather and rallying European equity markets.
• Following this high, prices subsequently dropped throughout the week as a result of higher supply at EUA auctions.
• The increase the EUA’s issued helped prices crash by just over 10% to finish the week at €27.24/t.
• API 2 coal prices continued to rise this week, hitting a 4-month high of €60.40/t, drawing influence from the surge in EU ETS prices recently.

Wholesale price snapshot