Energy Wholesale Market Review, 3 April 2020

• Day-ahead power fell 36.2% to a record low of £18.50/MWh following forecasts of low demand as a result of lockdown measures and seasonally high temperatures.
• May 20 power slipped 7.8% at £24.50/MWh and June 20 power decreased 4.5% to £26.00/MWh.

• Q320 power moved 1.0% lower to £29.00/MWh.
• The Annual October 20 contract rose 0.1% to £37.06/MWh, 30.5% lower than the same time last year (£53.32/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was down 0.2% to £29.95/MWh, reflecting its baseload counterpart.
• May 20 peak power Declined 6.1% at £27.89/MWh, and June 20 peak power decreased 4.1% to £29.60/MWh.

• The Annual October 20 peak power lost 2.3% to 42.00/MWh.
• This is 29.4% lower than the same time last year (59.53/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts were mixed this week, but rose on average by 0.2%.
• winter 20 power rose 0.2% to £39.12/MWh, while summer 21 was the same at £35.00/MWh.

• Seasonal peak power contracts were also mixed this week, moving down £1.4% on average.
• Winter 20 and summer 21 peak power dropped 2.4% and 2.2% respectively, falling to £45.17/MWh and £38.83/MWh.

Oil and Coal

Carbon

• Brent crude oil fell 2.1% to average $26.23/bl this week, though some strong gains were seen late in the week.
• Opening at a fresh 17-year low on 30 March, oil prices remained low on lack of any bullish indicators.
• Prices began to rise on 31 March over reports that US and Russia were looking to agree a deal to stabilise oil prices.
• Brent oil prices then reported their biggest daily gain on record on 2 April following the announcement by Donald Trump that Saudi Arabia and Russia could announce a major cut to oil production.
• The President of the United States tweeted that the cuts by both countries could amount to close to 10mn bpd, possibly more.

• API 2 coal reversed gains seen in recent weeks, falling 4.5% to average $55.06/t, as the effect of lowered demand begins to take effect on the coal market.
• Record-low LNG prices has not supported coal prices; Japan and South Korea (two of the world’s largest importers) will like look buy less coal in coming weeks as a result of cheap LNG.
• EU ETS carbon prices remained low this week, but rose 6.2% to average €17.33/t. As price movements continue to follow those in oil.
• Lockdown restrictions in many EU countries has seen volume demand at EUA auctions drop off in recent weeks.

Wholesale price snapshot