Energy Wholesale Market Review, 29 January 2021

• Day-ahead power fell 28.5% to £71.5/MWh, following increased wind generation experienced for large parts of the week, coupled with reduced demand in parallel and the new IFA2 1GW interconnector coming online.
• February 21 power slipped 4.1% to £67/MWh and March 21 power decreased 2.4% to £61.5/MWh.

• Q221 power moved 1.7% lower to £53.37/MWh.
• The annual April 21 contract lost 0.8% to £55.58/MWh, 36.4% higher than the same time last year (£40.75/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was down 39.6% to £87.00/MWh, following the day-ahead contracts lower.
• February 21 peak power declined 2.1% to £82.62/MWh, and March 21 peak power increased 1.1% to £68.47/MWh.

• The annual April 21 peak power contract lost 0.4% to £62.01/MWh.
• This is 30.5% lower than the same time last year (47.5/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Most seasonal power contracts declined this week, down on average by 0.4%.
• Summer 21 power decreased 0.9% to £52.50/MWh, while winter 21 fell 0.6% to £58.65/MWh.

• Most seasonal peak power contracts boosted this week, up 0.3% on average.
• Summer 21 and winter 21 peak power increased 0.3% and 0.4% respectively, to £56.54/MWh and £67.47/MWh.

Oil and Coal

Carbon

• Brent crude oil marginally reversed last week’s decline, lifting 0.8% to $55.93/bl this week.
• Despite prices rising, the general sentiment in the market remains cautious. Global lockdowns across many major economies continues, with little sign of easing in the coming weeks. Case numbers are generally responding to stringent lockdown measures however, with reports of falling numbers in Europe and China. Vaccination roll-out continues to provide some assurance to markets.
• Similarly, the Brent crude price continues to benefit from extended supply cut pledges from Saudi Arabia for February and March.
• API 2 coal rose 0.3% from the previous week to average $67.70/t.

• EU ETS carbon rose 1.6% to average €33.48/t.
• Like other commodity markets, news of high global case numbers of COVID-19 continues to act bearishly on the carbon price. On 29 January, the return of EUA auctions acted bearishly on prices with increased supply volumes although, the market reacted strongly, clearing relatively comfortably.
• We may continue to see prices fluctuate week-on-week but hold onto the stronger >€32.00/t price point.
• Colder weather forecast also acted bullishly on price movements, with increased heating demand.

Wholesale price snapshot