Energy Wholesale Market Review, 20 September 2019

• Day-ahead power lost 8.5% to £38.3/MWh.
• Month-ahead power fell 9.9% to £42.4/MWh and November 19 power dropped 3.0% to £53.1/MWh.

• Q419 power decreased 4.7% to £50.4/MWh.
• The annual October 19 power contract declined 0.8.% to end the week at £51.9/MWh.

Forward curve comparison

Annual October Contract

• Day-ahead peak power fell 8.0% to £41.3/MWh.
• October 19 peak power lowered 9.1% to £47.0/MWh.
• November 19 peak power slipped 3.2% to £61.0/MWh.

• Annual October 19 peak power was 0.9% lower at £57.4/MWh, £5.5/MWh above its baseload power counterpart.
• The contract is 3.3% above its value this time last month (£55.5/MWh), but 12.6% below the same time last year when it was £65.6/MWh.

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power prices experienced mixed movements. Winter 19 power declined 2.6% to £54.1/MWh, while summer 20 power rose 1.1% to £49.8/MWh.

• Seasonal peak power contracts were 0.1% lower on average.
• Winter 19 peak power decreased 2.6% to £60.5/MWh.

Oil and Coal

Carbon

• Brent crude oil gained 6.3% to average $65.5/bl.
• Prices rose significantly early in the week following drone strikes on Saudi Arabian oil infrastructure which knocked out approximately 5.7mn bl/d of production. This is equivalent to ~5% of total global output.
• However, prices did ease towards the end of the week after Saudi Arabia announced it would call on its oil inventories to replace lost production whilst full production would be back online by the end of September.
• API 2 coal prices rose 3.7% to average $70.0/t. The continuation of strong demand in India to replenish historically low coal stocks helped push prices higher. However, European demand remained weak amid an increase in renewable output on the Continent.

• EU ETS carbon lifted 0.5% to average €26.2/t.
• Early in the week carbon prices followed oil prices higher. However, prices dropped in the second half of the week amid reduced concerns of French nuclear shutdowns and reports that Saudi Arabia will restore oil production quicker than previously expected.
• Developments in talks between Ukraine and Russia on their gas transit contract will have implications for carbon prices in the coming weeks. Any agreement to maintain gas flows through Ukraine will support gas-fired power generation in Europe and as such EUA demand.

Wholesale price snaphot