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Energy Wholesale Market Review, 19 November 2021

Headlines

This week represented yet another bullish week for gas and power prices, in what continues to be a particularly volatile period for wholesale energy prices. Day-ahead gas rose 25.4% to 222.00p/th, with a combination of market drivers pushing up prices, amid news that the German regulator temporarily suspending certification for the Nordstream 2 pipeline, underpinned by an already tight gas market throughout Europe. Conversely, day-ahead power fell 8.0% to £230.00/MWh, with stronger periods of wind generation seen in the week, despite significant price rises seen on 19 November (up £44.00/MWh from 18 November). December 21 gas was up 16.0% at 225.13p/th, and January 22 gas increased 16.9% to 231.62p/th. Most seasonal gas contracts boosted this week, up by 4.0% on average, while both summer 22 and winter 22 gas increased 6.6% and 6.6% respectively, lifting to 108.75p/th and 111.37p/th. All seasonal power contracts rose this week, up on average by 5.5%, as summer 22 and winter 22 expanded 7.5% and 6.5% respectively, rising to £111.25/MWh and £113.99/MWh.

Baseload electricity
Day-ahead power fell 8.0% to £230.00/MWh, with weaker periods of wind generation seen in the week, despite significant price rises on Friday 19 November December 21 power climbed 21.1% at £230/MWh and January 22 power increased 17.9% to £246.88/MWh.		Q122 power moved 18.4% higher to £225/MWh. The annual April 22 contract rose 7.0% to £112.62/MWh, 149.5% higher than the same time last year (£45.13/MWh).
Forward Curve Comparison		Annual April Contract
Peak electricity
Day-ahead peak power was down 19.6% to £270.00/MWh, following baseload power lower. December 21 peak power declined 0.0% at £225/MWh, and January 22 peak power decreased 0.0% to £273/MWh.		The annual April 22 peak power rose 2.0% to £126.5/MWh This is 144.5% higher than the same time last year (51.74/MWh).
Forward curve comparison		Annual April contract
Seasonal power prices
Seasonal baseload power contracts		Seasonal baseload power curve
All seasonal power contracts grew this week, up on average by 5.5%. Summer 22 and winter 22 expanded 7.5% and 6.5% respectively, rising to £111.25/MWh and £113.99/MWh.		Most seasonal peak power contracts boosted this week, up 1.2% on average. Summer 22 peak power increased 7.0% to £123.00/MWh, while winter 22 peak power dropped 2.3% to £130.00/MWh.
Commodity price movements
Oil and Coal		Carbon
Brent crude prices fell 0.8% from the previous week to average $81.08/bl. Prices still remain ~84% higher than the same time a year prior. Brent crude prices continue to sit well above levels seen last year, drawing on tighter global gas and oil supply. Major oil producers in China and the USA are looking to exploit their crude reserves to combat the on-going market tightness, with increased supply into the market weighing on prices as a result. Meanwhile, API 2 coal rose 1.4% to average $109.60/t.		Carbon prices saw strong gains this week, with UK ETS prices up 8.9% to £59.83/t. The EU ETS mirrored these trends, up 9.0% to €66.97/t. A cold weather front making its way across much of North-West Europe and the UK has supported carbon prices, particularly as the week matured – with increased EUA demand required to cover gas-fired power generation. Lower periods of wind and renewable output supported carbon prices too, with the need for increased gas-fired generation to meet demand.
Wholesale price snapshot