Energy Wholesale Market Review, 03 June 2022

• Day-ahead power fell 12.5% to £140/MWh, following periods of higher wind outturn and lowering demand into the bank holiday weekend.
• July 22 power slipped 0.3% at £174.5/MWh and August 22 power decreased 4.6% to £179/MWh.

• Q322 power moved 0.6% higher to £192/MWh.
• The annual October 22 contract rose 4.1% to £207.5/MWh, 248.3% higher than the same time last year (£59.58/MWh).

Annual October Contract

• Day-ahead peak power was down 17.1% to £145.00/MWh, following its baseload counterpart lower.
• July 22 peak power declined 4.3% at £180.05/MWh, and August 22 peak power decreased 8.2% to £186.45/MWh.

• The annual October 22 peak power rose 2.6% to £253.5/MWh.
• This is 264.9% higher than the same time last year (69.48/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts experienced gains last week, up on average by 3.0%.
• Winter 22 and summer 23 contracts expanded 5.1% and 2.8% respectively, rising to £247.50/MWh and £167.50/MWh.

• Most seasonal peak power contracts boosted last week, up 2.7% on average.
• Winter 22 and summer 23 peak power contracts increased 1.6% and 4.1% respectively, rising to £308.60/MWh and £198.40/MWh.

Oil and Coal

Carbon

• Brent crude prices lifted 4.0% last week to average $119.26/bl.
• The prospect of an EU-wide embargo on Russian oil continued to outweigh demand concerns last week.
• The deal is thought to include carve-outs for member states most reliant on Russian oil, such as Hungary.
• Similarly, the back-drop of a globally tightened brent crude market continues to provide a strong foundation of ongoing price support.
• Elsewhere, reports that Chinese lockdown restrictions have begun to subside, eased future demand fears from what represents one of the largest oil consuming countries globally.
• API 2 coal fell 2.0% to average $233.80/t.

• Carbon markets saw bullish movements across both EU and UK ETS markets. The UK ETS gained 2.0% to average £82.72/t, while the EU ETS climbed 3.0% to average €84.54/t over the week.
• Both the UK and EU ETS carbon markets remain sensitive to change, with uncertainty in the wider European energy landscape amid the Russian-Ukraine war causing a ripple effect into carbon markets.
• From a bullish point of view last week, carbon prices mirrored most other global commodity markets which enjoyed a period of price growth. Similarly, we also observed a period of low auction supply, which lent support to prices across both the UK and ETS carbon markets.

Wholesale price snapshot