Energy Wholesale Market Review, 26 June 2020

• Day-ahead power fell 6.8% to £27.25/MWh, following forecasts of high wind generation towards the end of the week.
• July 20 power slipped 3.8% to £30.15/MWh and August 20 power increased 3.0% to £31.38/MWh.

• Q320 power moved 1.5% higher to £31.97/MWh.
• The annual October 20 contract rose 0.7% to £42.18/MWh, 18.5% lower than the same time last year (£51.76/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 5.3% to £31.6/MWh, opposing the direction of its baseload counterpart.
• July 20 peak power gained 3.8% to £34.29/MWh, and August 20 peak power increased 5.5% to £35.17/MWh.

• The annual October 20 peak power lost 1.5% to £47.89/MWh.
• This is 17.9% lower than the same time last year (58.31/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts saw mixed direction this week, but dropped down on average by 0.1%.
• Winter 20 and summer 21 lifted 1.2% and 0.1% respectively, rising to £44.71/MWh and £39.65/MWh.

• All seasonal peak power contracts boosted this week, up 1.4% on average.
• Winter 20 and summer 21 peak power increased 2.2% and 0.7% to £51.99/MWh and £43.79/MWh, respectively.

Oil and Coal

Carbon

• A week of volatile movements in the oil market saw Brent crude oil rise by 3.3% to average $41.98/bl, despite significant losses in the middle of the week.
• Prices reached a 3-month high of $43.82/bl on 23 June, finding support from assurances from the US President that the US-China trade deal remained intact, following earlier uncertainty.
• Prices then dropped to under $40/bl in the middle of the week on an increasing number of reports of rising COVID-19 cases.
• A mass second wave of the virus would likely reverse the rising trend in demand seen in the past month, and could see oil prices crash back down to the prices seen in March and April.
• Brent crude oil prices moved higher on 26 June on the news that demand continues to rise, despite the threat of a second COVID-19 wave.
• Reports showed that Chinese imports of Saudi oil rose to an all-time high in May.

• API 2 coal prices lifted 3.1% to average $56.08/t this week.
• Prices hit a similar 3-month high of $57.25/t as easing lockdown restrictions sparks a rise in consumption around the world.
• The EU ETS carbon price saw some volatility this week, ultimately reaching a 4-month high of €25.32/t on 25 June on stronger demand.

Wholesale price snapshot