Energy Wholesale Market Review, 27 September 2019

• Day-ahead power rose 4.6% to £40.0/MWh, supported by higher gas prices and weaker wind generation.
• Month-ahead power fell 0.9% to £42.0/MWh and November 19 power dropped 2.2% to £51.9/MWh.

• Q419 power decreased 1.6% to £49.6/MWh.
• The annual October 19 power contract declined 0.6% to end the week at £51.6/MWh. This is 11.7% lower than the same time last year (£58.4/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power rose 12.7% to £46.5/MWh, £6.5/MWh above its baseload counterpart.
• October 19 peak power slipped 0.3% to £46.9/MWh.
• November 19 peak power lowered 2.4% to £59.5/MWh.

• Annual October 19 peak power was 0.7% lower at £56.9/MWh, £7.8/MWh above its baseload power.
• The contract is 2.4% above its value this time last month (£55.6/MWh), but 11.9% below the same time last year when it was £64.7/MWh.

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal baseload power contracts moved lower, down 0.6% on average.
• Winter 19 power declined 0.9% to £53.6/MWh, while summer 20 lost 0.3% to £49.6/MWh.

• Seasonal peak power contracts were 0.5% lower on average.
• Winter 19 peak power decreased 0.7% to £60.0/MWh.

Oil and Coal

Carbon

• Brent crude oil fell 3.8% to average $63.1/bl.
• Prices have slipped from recent highs as previous concerns of lower Saudi Arabian production have eased, with the country’s production recovering to above 10.5mn bpd, 1.5mn below pre-attack levels.
• Last week, the International Energy Agency (IEA) announced it may lower its growth estimate forecasts for global oil demand for 2019 and 2020 if global economic growth continues to weaken.
• API 2 coal prices reversed the previous week’s gains, dropping 3.5% to average $67.6/t.
• Prices have been pressured by weaker demand amid lower gas prices and high coal stocks, with ARA terminals rising to 7.1mt, the highest since May.

• EU ETS carbon fell 2.5% to average €25.5/t.
• Although the UK Supreme Court’s ruling that the prorogation of Parliament was unlawful will likely ease concerns of a no-deal Brexit flooding the market with EUAs, carbon prices have fallen as higher volumes of EUAs were auctioned this week.
• In addition, forecasts of higher wind generation early in October in parts of NW Europe will also ease demand for EUAs next week.

Wholesale price snaphot