Energy Wholesale Market Review, 18 April 2019

Baseload electricity

• Day-ahead power reversed the previous week’s gains, down 3.3% to end the week at £44.3/MWh.
• The month-ahead contract fell 3.1% to £44.6/MWh and June 19 power dropped 3.6% to £45.3/MWh.

• Annual October 19 power slipped 0.7% week-on-week to £55.7/MWh.
• The contract is 13.0% above the same time last month (£49.3/MWh).

Forward curve comparison

Annual April Contract

Peak electricity

• Day-ahead peak power decreased 3.6% to £46.3/MWh, £2.0/MWh above its baseload counterpart.
• Day-ahead peak power is 11.3% lower than the same time last year when it was £52.2/MWh.
• May and June 19 peak power fell 3.8% and 3.3% to £47.6/MWh and £49.8/MWh, respectively.

• Annual October 19 peak power lost 0.8% to £61.3/MWh, remaining £5.6/MWh above its baseload power counterpart.
• The contract is 11.1% higher than its value this time last month (£55.1/MWh).

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts fell 0.6% on average.
• Winter 19 power dropped 0.6% to £60.4/MWh, up 13.0% from the same time last month when it was £53.5/MWh.

• Seasonal peak power contracts fell 0.7% on average, with only winter 20 rising, up 0.2%.
• The winter 19 peak contract was down 0.7% at £67.3/MWh.

Commodity price movements

Oil and Coal 

Carbon

• • Brent crude oil prices rose 0.9% to average $71.8/bl.
  • This week, oil prices ranged between $70.8/bl and $72.3/bl, a five-month high. Support continued to come from concerns of a tighter oil market amid OPEC+ production cuts, US sanctions on Iran and Venezuela, and unrest in Libya.
  • These factors are the key driving force in oil prices at the moment, offsetting any pressure from news that OPEC+ may halt production cuts beyond June 2019, and reports that US crude production is at a record high of 12.2mn bpd.
  • API 2 coal prices averaged $74.8/t this week, unchanged from the previous week.
  • Coal prices started the week at $76.0/t but dropped as low as $73.8/t on 16 April as low gas prices in Europe continued to drive coal-fired power plants out of the generation mix.

• EU ETS carbon prices jumped 4.7% to average €27.1/t.
• Prices peaked at €27.8/t on 17 April, a near 11-year high, as total auction volumes halved this week from the previous week.
• No auctions took place on 17 and 19 April, with Friday 19 April marking the start of a four-day Easter weekend.
• Last minute compliance buying is still taking place ahead of the 30 April compliance deadline.
• Carbon prices have remained bullish despite cheap gas prices and relatively expensive coal prices, which would be expected to drive coal-fired power stations out of the generation mix and therefore lower demand for EUAs.

Wholesale price snapshot