Energy Wholesale Market Review, 22 April 2022

Headlines

Near-term gas and power contracts moved lower this week, while most seasonal contracts continued to increase. Day-ahead gas dropped 11.2% to 158.00p/th, with warmer temperatures leading to reduced demand towards the end of the week. Month-ahead gas lost 7.2% to 185.16p/th and June 22 gas slipped 4.1% to 209.97p/th. Seasonal gas contracts rose 3.8% on average. The winter 22 contract was the only contract to move lower week-on-week, declining 2.8% to 243.36p/th, while summer 23 gas gained 4.4% to 196.85p/th. Power prices followed their gas counterparts closely, with day-ahead power losing 5.9% to £160.00/MWh. May 22 power dropped 3.2% to £181.00/MWh and the June 22 contract slipped 1.0% to £200.00/MWh. All seasonal power contracts increased this week, rising 7.8% on average. Winter 22 power edged 0.1% higher to £229.16/MWh and summer 23 power climbed 6.6% to £177.00/MWh. Brent crude oil gained 4.5% to average $108.66/bl, despite concerns of weaker global growth and wavering demand due to further Covid lockdowns in China. EU ETS carbon jumped 9.9% to average €84.83/t, while UK ETS gained 1.2% to average £78.13/t.

Baseload electricity
  • Day-ahead power lost 5.9% to £160.00/MWh, following its gas counterpart lower
  • May 22 power dropped 3.2% to £181.00/MWh and June 22 power declined 1.0% to £200.00/MWh.
  • Q322 power edged 0.1% lower to £218.00/MWh.
  • The annual October 22 contract rose 2.8% to £203.08/MWh.
Forward Curve Comparison

 

Annual April Contract

Peak electricity
  • Day-ahead peak power followed its baseloasd counterpart lower, losing 5.7% to £165.00/MWh.
  • May 22 peak power fell 4.6% to £197.80/MWh, and June 22 peak power decreased 2.3% to £216.70/MWh.
  • The annual October 22 peak power jumped 13.1% to £238.73/MWh
  • This is 335.6% higher than the same time last year (£54.80/MWh).

Forward curve comparison

 

Annual April contract

 

Seasonal power prices

Seasonal baseload power contracts

 

 

Seasonal baseload power curve

 

 

  • All seasonal power contracts saw gains this week, rising on average by 7.8%.
  • Winter 22 lifted 0.1% to £229.16/MWh and summer 23 rose 7.1% to £177.00/MWh.
  • All seasonal peak power contracts also moved higher this week, up 27.2% on average.
  • Summer 23 peak power increased 39.0% to £197.35/MWh whilst the winter 23 contract saw similar gains, up 8.5% to £231.05/MWh.
Commodity price movements
 

Oil and Coal

 

Carbon

  • Brent crude oil gained 4.5% to average $108.66/bl this week.
  • Despite averaging higher than last week, Brent prices moved steadily throughout the week, amid concerns of weaker global growth and wavering demand due to further Covid-19 restrictions in China.
  • Elevated prices for Brent crude oil are likely to remain, given the tight global supply/demand picture at present.
  • EU ETS carbon jumped 9.9% to average €84.83/t, while UK ETS carbon climbed 1.2% to average £78.13/t.
  • EU ETS carbon prices were driven higher by a combination of strong auction results and a surge in speculative buying in the second half of the week.
  • The continuation of higher gas prices has also increased the levels of gas-to-coal switching, increasing demand for EUAs.
Wholesale price snapshot 

 

Posted by TEAM on 25 April 2022