Energy Wholesale Market Review, 22 January 2021

• Day-ahead power rose 52.9% to £100.00/MWh, following a notable drop in wind generation at the end of the week and greater demand forecast at the start of next week.
• February 21 power slipped 3.6% at £69.85/MWh and March 21 power increased 3.8% to £63/MWh.

• Q221 power moved 5.1% higher to £54.29/MWh.
• The annual April 21 contract rose 3.4% to £56/MWh, 28.7% higher than the same time last year (£43.5/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was up 100.4% to £144.00/MWh, following its baseload counterpart higher.
• February 21 peak power declined 8.9% to £84.43/MWh, and March 21 peak power decreased 3.5% to £67.71/MWh.

• The annual April 21 contract lost 0.7% to £61.79/MWh.
• This is 24.2% lower than the same time last year (49.75/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal power contracts boosted this week, up on average by 1.2%.
• Summer 21 and winter 21 climbed 4.1% and 2.7% respectively, rising to £53.00/MWh and £59.00/MWh.

• Most seasonal peak power contracts lifted this week, up 0.2% on average.
• Summer 21 and winter 21 peak power increased 0.3% and 1.0%, to £56.37/MWh and £67.21/MWh, respectively.

Oil and Coal

Carbon

• Brent crude oil slipped marginally to $55.48/bl this week.
• Prices were afflicted this week by news of COVID-19 case rising globally, despite the roll-out of several different vaccinations. As case numbers have rapidly spiralled again in recent weeks, it has led to many economies entering tougher phases of lockdown restrictions once again to combat the spread of the virus, fuelling demand fears in the market.
• However, the Brent crude price continues to benefit from extended supply cut pledges from Saudi Arabia for February and March, to combat these market fears of lack of demand and oversupply.
• API 2 coal fell 5.1% from the previous week to average $67.52/t.

• EU ETS carbon fell this week, slipping 2.8% to average €32.96/t.
• Like other commodity markets, news of a resurgence in global case numbers of COVID-19 has acted bearishly on prices. Milder temperatures have also acted to stifle price growth in carbon markets, further weighed upon by increased renewable generation in periods this week.
• Delayed auctions previously acting to support prices will likely be dampened by the possibility of a return in supply from 29 January.
• Carbon markets will see continued support from more ambitious EU climate targets, but may be weighed upon by news of increases in COVID-19 cases globally, fuelling market uncertainty.

Wholesale price snapshot