Energy Wholesale Market Review, 2 July 2021

• Day-ahead power rose 5.1% to £92.50/MWh, reaching a four month high on 1 July at £96.75/MWh. Prices have been driven higher by low wind output and rising gas prices.
• August 21 power increased 8.5% to £91.00/MWh and September 21 power went up 7.6% to £92.35/MWh.

• Q4-21 power leapt 15.0% to £97.55/MWh.
• The annual October 21 contract lifted 5.8% to £81.08/MWh, 73.3% higher than the same time last year (£46.79/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power grew 8.2% to £102.0/MWh, following its baseload counterpart upwards.
• August 21 peak power rose 6.9% to £97.20/MWh, September 21 peak power lost 9.6% to £85.00/MWh.

• Annual October 21 peak power went up 8.1% to £82.65/MWh.
• This is 56.6% higher than the same time last year (£52.77/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts gained 0.1% on average this week.
• Winter 21 power climbed 7.4% to £97.65/MWh, while Summer 22 power increased 3.2% to £64.50/MWh.

• Seasonal peak power contracts increased 10.8% on average.
• Winter 21 peak power jumped 13.9% to £103.30/MWh and Summer 22 peak power eased 0.4% to £62.00/MWh.

Oil and Coal

Carbon

• Brent crude oil went up 0.4% to average $75.13/bl, reaching a fresh high of $75.63/bl on 2 July, its highest price since November 2018.
• Oil prices were guided by developments stemming from OPEC+ members meeting in the latter half of the week to discuss quotas going forward from August, along with the potential exstention of production cuts beyond April 2022.
• There is the potential for a modest increase in production between August and December 2021 indicating the views of OPEC+ members that global demand could uptick in the coming months.

• EU ETS carbon rose 4.5% to average €56.48/t, reaching an all-time high on Thursday. Elsewhere, UK ETS carbon rose 2.7% to average £47.12/t.
• Carbon prices continue to be influenced by rising gas prices throughout the week. Additional support was found from leaked information from the European Commission, concerning proposed reforms to the EU ETS.
• EU ETS gains were pegged back by the UK ETS’s fortnightly auction, coupled with higher auction supply.

Wholesale price snapshot