Energy Wholesale Market Review, 20 August 2021

• Day-ahead power rose 1.9% to £107/MWh, taking direction from gas prices, particularly at the week’s start.
• September 21 power slipped 6.9% at £101.75/MWh and October 21 power decreased 1.6% to £110/MWh.

• Q421 power moved 4.4% lower to £109.95/MWh.
• The annual October 21 contract lost 4.6% to £91.38/MWh, 99.2% higher than the same time last year (£45.87/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 4.5% to £115.00/MWh, following its baseload counterpart higher.
• September 21 peak power gained 2.1% at £112/MWh, and October 21 peak power increased 2.0% to £110.99/MWh.
  

• The annual October 21 peak power contract fell 7.3% to £102.63/MWh.
• This is 99.3% lower than the same time last year (51.5/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• The majority of seasonal power contracts declined this week, down on average by 2.2%.
• Winter 21 power decreased 5.1% to £107.50/MWh, while summer 22 fell 3.8% to £75.25/MWh.

• Most seasonal peak power contracts boosted this week, up 8.4% on average.
• Winter 21 gas increased 13.7% to £128.75/MWh, while summer 22 peak power dropped 1.9% to £76.50/MWh.

Oil and Coal

Carbon

• Brent crude oil slipped for the third consecutive week this week. As such, prices averaged 2.7% lower than the previous week at $68.31/bl.
• In conjunction with these losses, on 20 August, Brent crude slipped to a three-month low of $66.31/bl.
• The primary driver of bearish movements stemmed from demand concerns.
• Reports circulating this week highlighted rising Covid-19 cases and the increased prevalence of variants, which continues to intensify concern within the market.

• The UK carbon market rose for the fourth consecutive week, building on strong recorded gains. Subsequently the UK ETS rose 2.4% to £49.23/t, with the EU ETS rebelling these bullish price movements, down 0.3% to €56.59/t, however.
• The UK ETS also breached £50.00/t on 17 August, its highest since the opening week of the scheme.
• Bullish supporting trends across carbon markets remain relatively consistent. Tighter gas markets, across North-West Europe and the UK bolster prices. Similarly, lowering auction volumes in August continue to lend support, driving increased competition for limited EUA’s.
  

Wholesale price snapshot