Energy Wholesale Market Review, 19 March 2021

• Day-ahead power fell 5.1% to £63.58/MWh, following gas prices lower on the near curve, compounded by forecasts of strong wind generation at the start of next week.
• April 21 power slipped 2.5% to £55.5/MWh and May 21 power decreased 3.6% to £53.6/MWh.

• Q221 power moved 1.9% lower to £55.09/MWh.
• The annual April 21 contract lost 1.5% to £59.41/MWh, 48.5% higher than the same time last year (£40.01/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was down 23.1% to £61.50/MWh following its baseload counterpart lower.
• April 21 peak power declined 3.6% at £59.3/MWh, and May 21 peak power decreased 3.6% to £57.38/MWh.

• The annual April 21 peak power lost 2.0% to £66.84/MWh.
• This is 47.6% lower than the same time last year (45.27/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal power contracts declined this week, down on average by 0.6%.
• Summer 21 power decreased 2.3% to £54.50/MWh, while winter 21 fell 0.7% to £64.32/MWh.

• All seasonal peak power contracts declined this week, down 1.7% on average.
• Summer 21 and winter 21 peak power dropped 3.3% and 0.9% respectively, falling to £59.12/MWh and £74.56/MWh.

Oil and Coal

Carbon

• Brent crude oil prices slipped this week, down 2.1% to average $67.39/bl.
• Despite continued optimism in the market, prices were weighed upon this week by news select countries in Europe were opting to delay continued vaccination roll-outs, amid concerns of side-effects from the Oxford AstraZeneca vaccine.
• Consequently, with cases still rising in these countries, threats of further nationwide lockdowns have prompted demand concerns for the market.
• Meanwhile, API 2 coal rose 1.4% from the previous week to average $69.27/t.

• EU ETS carbon prices rose this week, rising 4.4% to average €42.55/t.
• Prices reached a new all-time high on 18 March, up to €43.63/t.
• Prices found support from increased demand from compliance buyers and record numbers of speculative trading.
• A buoyant Brent crude market and forecasts of cooler forecast temperatures expected in Europe next week have also fuelled carbon price rises.

Wholesale price snapshot