Energy Wholesale Market Review, 23 October 2020

• Day-ahead power fell 4.5% to £43.75/MWh, owing to increased wind generation expected towards the end of the week.
• November 20 power climbed 2.7% to £51.25/MWh and December 20 power increased 2.2% to £52.25/MWh.

• Q121 power moved 1.6% higher to £53.5/MWh.
• The annual April 21 contract rose 3.1% to £48.11/MWh, 0.9% lower than the same time last year (£48.54/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 5.9% to £51.50/MWh.
• November 20 peak power declined 1.6% to £58.28/MWh, and December 20 peak power decreased 0.7% to £58.42/MWh.

• The annual April 21 peak power lost 1.0% to £52.79/MWh.
• This is 4.0% lower than the same time last year (£55.00/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal baseload power contracts rose this week, up on average by 1.5%.
• Summer 21 and winter 21 power gained 3.9% and 2.3% respectively, rising to £45.16/MWh and £51.05/MWh.

• Most seasonal peak power contracts increased this week, up 0.4% on average.
• Summer 21 and winter 21 peak power increased 1.8% and 0.3% to £48.62/MWh and £56.96/MWh, respectively.

Oil and Coal

Carbon

• Brent crude oil marginally rose this week, seeing an increase of 0.3% to average $42.39/bl. The Brent crude oil price maintained relative stability above $42.00/bl for the entirety of the week, despite fresh restrictions imposed across many economies this week.
• The Brent crude oil price continued to draw on its recent resilience, supported by OPEC members not ruling out supply cuts in an attempt to provide a boost to prices.
• While prices remain stable, the market is anticipating a notable decline amid concerns of rising case numbers of the Coronavirus in the coming weeks.
• API 2 coal reversed the previous week’s decline, lifting 1.3% to average $59.50/t for the week.

• EU ETS carbon fell again this week. Prices dropped by a further 3.2% to average €24.47/t for the week.
• The drop in prices this week is symptomatic of the general sentiment observed across many global commodity markets, as the threat of Coronavirus disruption remains.
• Compounding this week’s decline was also a general concern of a ‘hard Brexit’ and uncertainties in future carbon trading arrangements for the UK. No firm route forward has been agreed despite the 1 January back-stop date drawing closer.

Wholesale price snapshot