Energy Wholesale Market Review, 22 October 2021

• Following its gas counterpart, day-ahead power fell 9.5% to £181.00/MWh, driven by higher wind output at the start of the week.
• November 21 power lost 15.1% to £213.00/MWh and December 21 power slipped 15.3% to £218.00/MWh.

• Q122 power declined 4.1% to £228.24/MWh.
• The annual April 22 contract fell 1.6% to £113.65/MWh, 140.8% higher than the same time last year (£47.20/MWh).

Annual April Contract

• Day-ahead peak power was down 2.4% to £205.00/MWh, following its baseload counterpart lower.
• November 21 peak power gained 3.2% to £325.00/MWh, and December 21 peak power increased 8.0% to £289.00/MWh.

• The annual April 22 peak power dipped 0.5% to £138.50/MWh
• This is 161.6% higher than the same time last year (£52.95/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts reported losses, down by 3.1% on average.
• Summer 22 and winter 22 lost 2.0% and 1.3% respectively, to £111.80/MWh and £115.50/MWh.

• Most seasonal peak power contracts eased this week, down 0.3% on average.
• Summer 22 peak power decreased 1.2% to £124.00/MWh, while winter 22 peak power remained at £153.00/MWh.

Oil and Coal

Carbon

• Brent crude rose 1.3% to average $85.02/bl, finding support from the persisting tight global supply outlook. Brent crude also reached a fresh three-year high on Monday at $86.00/bl.
• Prices were supported mid-week after the U.S. Energy Information Administration (EIA) reported that U.S. crude inventories fell by 400,000 barrels for the week up to October 15, meaning inventories remain below the five-year average for this time of the year.
• The underlying tight supply outlook has still not persuaded OPEC+ to increase supply to satisfy heightened demand in the market, continuing to support higher prices.

• Bearish price movements continued again this week, though both the UK and EU ETS remain at heightened price points by comparison to earlier this year.
• EU ETS carbon went down 3.0% to €58.10/t, and UK ETS carbon lowered 12.2% to £56.95/t, weighed on by higher renewables output across Europe.
• Lower prices were also as a result of trading activity earlier in the week, with prices breaching technical support levels on Tuesday, leading to traders selling EUAs as a result. However, losses were pegged back towards the end of the week, as traders sought to buy up EUAs at reduced prices

Wholesale price snapshot