Energy Wholesale Market Review, 23 November 2018

Baseload electricity

• Day-ahead power dropped 4.6% to £67.0/MWh.
• The contract started the week at £60.3/MWh, with higher wind generation expected the following day.
• December 18 and January 19 power lowered 6.1% and 4.3% to £65.5/MWh and £67.0/MWh respectively.

• Annual April 19 power decreased 2.2% to £59.6/MWh.
• The contract is 2.2% below the same time last month when it was £59.9/MWh, and 33.0% above the same period last year (£44.8/MWh).

Forward curve comparison

Annual October Contract

Peak electricity

• Day-ahead peak power gained 3.1% week-on-week to £75.3/MWh. This was £8.3/MWh above its baseload counterpart, a £5.3/MWh increase week-on-week.
• Month-ahead peak power went down 6.4% to end the week at £72.2/MWh, £6.7/MWh above its baseload counterpart.

• Week-on-week, annual April 19 peak power went down 1.8% to £65.4/MWh. The contract was £5.8/MWh above its baseload power counterpart.
• The contract was 0.3% below its price last month (£65.6/MWh) and 29.6% higher than its value last year (£50.5/MWh).

Forward curve comparison

Annual April Contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal baseload power contracts fell, down 1.0% on average, with summer 21 the exception.
• Summer and winter 19 power went down 2.6% and 1.9% to £56.7/MWh and £62.5/MWh respectively.

• All seasonal peak power contracts decreased this week, down 1.2% on average.
• Prices followed their gas counterparts, with seasonal gas contracts 3.0% lower on average.

Commodity price movements

Oil and Coal

Carbon

• The weekly average Brent crude oil price fell for a seventh consecutive week, down 5.3% to average $64.3/bl.
• Within-day oil prices plummeted to $58.9/bl on 23 November, a 13-month low.
• This followed news earlier in the week that US crude stocks rose for a ninth consecutive week to their highest since December 2017 at 446.9mn barrels.
• API 2 coal prices dropped 4.6% to average $83.7/t, down from $87.8/t the previous week.
• Prices fell to $83.0/t on 21 November, the lowest since April as Chinese demand for the commodity continues to fall following the country’s decision to stop seaborne thermal coal imports until 2019.

• EU ETS carbon prices continued to recover, experiencing a third consecutively weekly rise.
• Prices were up 1.3% to average €19.9/t and ended the week above €21.0/t for the first time in seven-weeks.
• Prices have resurged as cheaper coal prices and favourable clean dark spreads have increased demand for permits in Europe.
• With API 2 coal prices expected to remain near or below current levels, EU ETS carbon could rise further as coal fired-power generation becomes economically attractive compared to gas.

Wholesale price snapshot