Energy Wholesale Market Review, 21 May 2021

• Day-ahead power down 10.7% to £73.25/MWh, amid stronger wind output throughout the week. However, prices remained unseasonably high due to strong demand and high gas prices providing support.
• June 21 power slipped 3.0% to £75.50/MWh and July 21 power dropped 5.4% to £74.75/MWh.

• Q321 power moved 2.5% lower to £74.99/MWh.
• The annual October 21 contract lost 4.3% to £70.35/MWh, which was 65.2% higher than the same time last year (£42.58/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power eased 13.1% to £76.15/MWh, following downward price movements from its baseload counterpart.
• June 21 peak power declined 0.5% at £80.35/MWh. Alternatively, July 21 peak power rose 2.6% to £79.00/MWh.

• The annual October 21 peak power contract lost 6.4% to £78.20/MWh.
• This was 60.8% higher than the same time last year (£48.63/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 6.9%.
• Winter 21 and summer 22 fell 3.9% and 4.8% respectively, down to £81.20/MWh and £59.50/MWh.

• The majority of seasonal peak power contracts saw gains this week, rising by 3.0% on average.
• Winter 21 and summer 22 peak power increased 5.1% and 8.3% respectively, to outturn at £91.70/MWh and £64.70/MWh.

Oil and Coal

Carbon

• Brent crude oil fell 0.5% to average $67.82/bl across the week.
• Economic reopening in Europe and the US was countered by demand concerns over surging COVID-19 cases in Asia and expectations that sanctions on Iranian oil exports will be lifted.
• Additional pressure came from news that the Energy Information Administration reported a US crude oil inventory build of 1.3 million barrels for the week to May 14. This was notably higher than earlier estimates which had forecast a 620,000 barrel increase for the same period.

• EU ETS carbon lost 0.6% to average €53.23/t, after some profit-taking this week, moving away from the highs observed in previous weeks.
• EUA prices took a drive mid-week due to high auctions volumes, leading to oversupplied auctions. More generally, prices eased as market participants remained wary of increased speculative profit taking.
• UK ETS carbon ended its first week of trading to average £47.87/t, outturning £2.12/t higher on average against the equivalent EU ETS price.

Wholesale price snapshot