Energy Wholesale Market Review, 22 January 2021

Headlines

It has been a largely bullish week for gas and power price contracts, with exceptions coming from longer dated contracts. Day-ahead gas rose 1.7% to 61.00p/th, following forecasts of near-zero temperatures forecast early next week and periods of increased demand expected. Day-ahead power rose 52.9% to £100.00/MWh, following a notable drop off in wind generation at the end of the week and greater demand forecast at the start of next week. February 21 gas was up 0.2% at 59.92p/th, and March 21 gas increased 6.4% to 56.64p/th. Most seasonal gas contracts rose this week, up by 3.7% on average, while summer 21 and winter 21 gas increased 7.1% and 5.4% respectively, lifting to 44.20p/th and 52.23p/th. Most seasonal power contracts gained this week, up on average by 1.2%, as summer 21 and winter 21 rose 4.1% and 2.7%, to £53.00/MWh and £59.00/MWh, respectively. 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. EU ETS carbon felt 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.

Baseload electricity
  • 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

Baseload electricity Forward curve comparison 22 January 2021

Annual April Contract

Baseload electricity Annual April contract 22 January 2021

Peak electricity
  • 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

Peak electricity Forward curve comparison 22 January 2021

 

Annual April contract

Peak electricity Annual April contract 22 January 2021

 

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 22 January 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 22 January 2021

  • 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.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 22 January 2021

Carbon

Commodity price movements Carbon 22 January 2021

  • 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 

Wholesale price snapshot

Posted by TEAM on 25 January 2021
  • Wholesale Market

    • 2021 (8)
    • +2020 (51)
    • +2019 (50)
    • +2018 (17)
  • Blog & News Archive

    • 2021 (12)
    • +2020 (84)
    • +2019 (87)
    • +2018 (59)
    • +2017 (32)
    • +2016 (33)
    • +2015 (57)
    • +2014 (26)
    • +2013 (13)
    • +2012 (8)
    • +2010 (1)