Energy Wholesale Market Review, 18 September 2020

Headlines

All gas contracts rose this week, supported by a rise in oil prices and an increase in gas-for-power demand, the latter owing to a significant reduction in wind speeds this week. October 20 gas was up 4.6% to 29.16p/th, and November 20 gas increased 1.3% to 35.47p/th. Seasonal gas contracts out to summer 22 lifted 1.5% on average, with the winter 20 contract up 1.5% to 37.50p/th. Similarly, most power contracts rose, owing to an underlying rise in gas and commodity markets. Near-term power contracts saw additional support from very low wind speeds and high continental power prices, which caused a surge in day-ahead and within-day prices mid-week. Seasonal power contracts increased 1.0% on average, with winter 20 and summer 21 prices expanding 1.2% and 2.7% respectively, to £51.00/MWh and £44.25/MWh. The EU ETS carbon price rebounded upwards this week, boosting 7.2% to average €29.23/t, as the European Commission moved forwards on setting more stringent 2030 climate targets. Brent crude oil similarly rose by 1.1% to average $41.27/bl, amid OPEC encouraging its members to stick with their production quotas despite low prices.

Baseload electricity
  • Day-ahead power rose 9.3% to £52.75/MWh, as periods of significantly lower wind generation this week created a bullish sentiment as temperatures once again decline.
  • October 20 power climbed 1.7% to £42.90/MWh and November 20 power increased 2.7% to £53/MWh.
  • Q420 power moved 1.5% higher to £49.22/MWh.
  • The annual October 20 contract rose 1.9% to £47.63/MWh, but was still 8.0% lower than the same time last year (£51.79/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 18 September 2020

Annual October Contract

Baseload electricity Annual October contract 18 September 2020

Peak electricity
  • Day-ahead peak power was up 13.7% to £59.25/MWh, similar to its baseload counterpart, as day-light hours continue to draw in and bullish sentiment swept spot power prices this week.
  • October 20 peak power gained 1.8% to £49.69/MWh, and November 20 peak power increased 4.0% to £63.28/MWh.
  • The annual October 20 peak power contract lost 2.3% to £54.37/MWh.
  • This is 7.1% lower than the same time last year (58.5/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 18 September 2020

Annual October contract

Peak electricity Annual October contract 18 September 2020

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 18 September 2020

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 18 September 2020

  • Most seasonal power contracts boosted this week, up on average by 1.0%.
  • Winter 20 and summer 21 expanded 1.2% and 2.7% respectively, rising to £51.00/MWh and £44.25/MWh.
  • Most Seasonal peak power contracts also rose this week, up 1.8% on average.
  • Winter 20 and summer 21 peak power increased 2.7% and 1.7% respectively, up to £60.13/MWh and £48.61/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 18 September 2020

Carbon

Commodity price movements Carbon 18 September 2020

  • Brent crude oil prices rose marginally this week, seeing a 1.1% increase to average $41.27/bl— but dipping under $40/bl at the beginning of the week.
  • The brent crude oil price gained support as OPEC encouraged its members to stick to their production quotas with some reports of a supply deficit.
  • Demand concerns also continue to resonate through the market, with prices consequently struggling to gain momentum.
  • Following a decline last week, EU ETS prices rose 7.2% to average €29.23/t this week.
  • The market experienced mixed movements but remained above €28.00 for the entirety of the week.
  • The sustained positive sentiment in the market was surrounded by proposals of more ambitious 2030 climate targets for the EU.
Wholesale price snapshot 

Wholesale price snapshot 18 September 2020

Posted by TEAM on 21 September 2020
  • Wholesale Market

    • 2020 (43)
    • +2019 (50)
    • +2018 (17)
  • Blog & News Archive

    • 2020 (72)
    • +2019 (87)
    • +2018 (59)
    • +2017 (32)
    • +2016 (33)
    • +2015 (57)
    • +2014 (26)
    • +2013 (13)
    • +2012 (8)
    • +2010 (1)