Energy Wholesale Market Review, 20 November 2020

• Day-ahead power rose 20.3% to £44.5/MWh, following weaker renewable generation coupled with periods of reduced wind generation throughout the week.
• December 20 power slipped 7.9% to £43.5/MWh and January 21 power decreased 9.4% to £47.9/MWh. 

• Q121 power moved 6.8% lower to £46.5/MWh.
• The annual April 21 contract lost 3.8% to £44.94/MWh, 6.4% lower than the same time last year (£48/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was up 0.5% to £48.75/MWh, following its baseload counterpart higher.
• December 20 peak power declined 2.7% to £51.4/MWh, and January 21 peak power decreased 3.9% to £55.21/MWh.

• The annual April 21 peak power lost 2.3% to £50.67/MWh.
  
• This is 6.4% lower than the same time last year (54.11/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined this week, down on average by 3.4%.
• Summer 21 power decreased 5.2% to £41.40/MWh, while winter 21 fell 2.6% to £48.49/MWh.

• All Seasonal peak power contracts declined this week, down 1.9% on average.
• Summer 21 and winter 21 peak power dropped 3.4% and 1.3% respectively, falling to £45.89/MWh and £55.45/MWh.

Oil and Coal

Carbon

• Brent crude oil climbed again this week, lifting a further 2.1% from the week prior to average $44.05/bl – reaching a two-month high on 19 November with prices at $44.31/bl.
• Oil prices continue to gain momentum from further vaccination developments announced throughout this week.
• Similarly, OPEC+ is looking at the potential of delaying supply increases originally proposed for January 2021, as a pre-emptive mechanism to provide further support to the Brent crude price during an important period for many global commodity markets looking to emerge from the ‘second wave’ of Coronavirus.
• API 2 coal gained 0.9% from the previous week to average $56.25/t.

• EU ETS carbon climbed a further 2.9% to average €26.23/t, this week. Like other commodity markets, carbon prices rose to a milestone high, reaching a one-month high of €27.60/t on 18 November.
  
• Carbon prices, like many global commodities markets this week, found support from the positive news of COVID-19 vaccinations. Additionally, EUA auctions are expected to be delayed until late January 2021 at the earliest for technical reasons, offering support to prices in the near-term.
  
• Carbon prices will continue to be suppressed by on-going Brexit uncertainty, partially offsetting price growth in recent weeks.

Wholesale price snapshot