Energy Wholesale Market Review, 24 May 2019

Baseload electricity

• Day-ahead power fell 9.4% to £37.0/MWh, amid falling gas prices and decreasing demand.
• Month-ahead power slipped 0.9%% to £41.0/MWh and July 19 power lost 1.2% to £41.0/MWh.

• Annual October 19 power rose 0.2% week-on-week to £53.3/MWh.
• The contract is 4.2% lower than the same time last month (£55.6/MWh).

Forward curve comparison

Annual April Contract

Peak electricity

• Day-ahead peak power dropped 11.0% to £38.5/MWh, just £1.5/MWh above its baseload counterpart.
• Day-ahead peak power is 34.7% lower than the same time last year when it was £59.0/MWh.
• June and July 19 peak power lost 1.2% and 1.0% to £45.0/MWh and £45.3/MWh, respectively.

• Annual October 19 peak power slipped 0.1% to end the week at £59.1/MWh, £5.8/MWh above its baseload power counterpart.
• The contract is 3.5% below its value this time last month (£61.3/MWh), but 4.0% above the same time last year when it was £56.8/MWh.

Forward curve comparison

Annual April contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts rose 0.8% on average.
• However, winter 19 power declined 0.1% to £57.8/MWh.
• Summer 20 power gained 0.6% to £48.8/MWh.

• Seasonal peak power contracts climbed 0.9% on average, although winter 19 peak power fell 0.3% to £64.8/MWh.
• Summer 20 peak power lifted 0.5% to £53.4/MWh.

Commodity price movements

Oil and Coal 

Carbon

• • Brent crude oil slipped 1.0% to average $71.0/bl, this week.
  • Data showing that US crude inventories rose to their highest levels since July 2017 drove prices downwards.
  • Additionally, outlooks of global oil demand were dampened by the lack of progress in talks between the US and China, and slower than expected economic growth in the US, Europe and Japan.
  • API 2 coal prices lost 3.2% to average $68.0/t.
  • Prices were pushed lower by healthy supply and high stock levels in Europe.
  • Data showing that Germany’s coal-fired generation fell 22% year-on-year in April further weighed on prices.

• EU ETS carbon prices dropped 2.8% to average €25.0/t.
• Weak results from Thursday’s auction and the depressive effect of lower oil prices and global stock markets on the energy market conspired to push prices lower.
• The lack of progression in the UK’s Brexit withdrawal bill added further downward pressure on carbon prices.

Wholesale price snapshot