Energy Wholesale Market Review, 24 January 2020

• Day-ahead power fell 8.1% to £35.40/MWh as greater wind generation later in the week weighed on prices.
• February 20 power slipped 3.5% to £37.00/MWh and March 20 power decreased 3.9% to £36.00/MWh.

• Q220 power moved 4.6% lower to £35.85/MWh.
• The Annual April 20 contract lost 4.8% to £40.03/MWh, 27.2% lower than the same time last year (£55.02/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power went down 6.4% to £40.00/MWh, following its baseload counterpart lower.
• February 20 peak power declined 4.2% to £42.05/MWh, and March 20 peak power decreased 3.4% to £39.90/MWh.

• The annual April 20 peak power lost 4.7% to 45.40/MWh.
• This is 26.2% lower than the same time last year (61.53/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined this week, down on average by 4.1%.
• Summer 20 power decreased 4.1% to £35.90/MWh, while winter 20 fell 5.4% to £44.15/MWh.

• All Seasonal peak power contracts declined this week, down £4.3% on average.
• Summer 20 and winter 20 peak power dropped 4.0% and 5.3% respectively, falling to £39.75/MWh and £51.05/MWh.

Oil and Coal

Carbon

• Brent crude oil sipped 1.7% to average $63.56/bl, ending the week at $61.75/bl, over fears that the outbreak of the coronavirus in Wuhan, China will hamper the country’s oil demand.
• Currently, the largest global importer of oil, stable consumption of the commodity in China is vital to upholding Brent prices. With the city of over 11mn people in near-lockdown, oil consumption within the city has decreased due to a lack of movement, while oil prices have also been weighed upon by the lack of air travel both internationally and domestically.
• API 2 coal averaged $60.51/t, declining throughout the week to continue the bearish trend seen with coal prices.

• EU ETS carbon increased this week, rising 1.9% to average €24.96/t although prices continue to struggle on low demand in the current mild winter season.
• In a report published on 22 January, analysts at Refinitiv announced that world carbon markets grew by 34% in €194bn in value in 2019, despite a decrease in volume of trades. The largest increase was by the European market, which expanded by 30% to €169bn, with analysts citing the introduction of the Market Stability Reserve (MSR) the largest source of growth.

Wholesale price snapshot