Energy Wholesale Market Review, 30 October 2020

• Day-ahead power fell 18.3% to £35.75/MWh, following, following strong wind output throughout the week.
• November 20 power slipped 7.3% to £47.5/MWh and December 20 power decreased 8.6% to £47.75/MWh.

• Q121 power moved 5.6% lower to £50.5/MWh.
• The annual April 21 contract lost 5.4% to £45.53/MWh, 5.5% lower than the same time last year (£48.2/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was down 6.8% to £48.00/MWh, amid mild temperatures and high renewables output.
• November 20 peak power declined 3.0% to £56.53/MWh, and December 20 peak power decreased 5.0% to £55.47/MWh.

• The annual April 21 peak power contract lost 2.7% to £51.34/MWh.
• This is 6.2% lower than the same time last year (54.72/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined this week, down on average by 4.4%.
• Summer 21 power decreased 6.1% to £42.40/MWh, while winter 21 fell 4.7% to £48.65/MWh.

• All seasonal peak power contracts declined this week, down 2.9% on average.
• Summer 21 and winter 21 peak power dropped 3.5% and 2.1% respectively, falling to £46.90/MWh and £55.77/MWh.

Oil and Coal

Carbon

• Brent crude oil fell notably this week, seeing a decrease of 6.6% to average $39.57/bl. In weeks previous, the Brent crude price had remained relatively stable sitting above the $40.00/bl mark.
• However, news of tighter restrictions rolled out across Europe and the UK combined with increasing case numbers as pre-empted the week prior, has weighed on prices heavily this week.
• Increased lockdown measures continue to generate concern within the market from a likely drop-off in demand. Similarly, a ramp up in production from Libya late this week had added to a further bearish outlook on prices with concerns over oversupply.
• API 2 coal similarly declined, falling 3.4% to average $57.45/t for the week.

• EU ETS prices fell again this week. Prices dropped by a further 3.5% to average €23.60/t for the week.
• The drop in prices this week was symptomatic of the general sentiment observed across many global commodity markets, as COVID-19 cases begin to climb at an increased pace.
• An agreed verdict for the carbon market post-Brexit is still yet to be agreed, fuelling further fears within the market about the future of EU ETS trading.
• The uncertainty surrounding a definitive framework for the market has dampened prices for several weeks, combined with already suppressed prices as a result of wavering demand from the Coronavirus.

Wholesale price snapshot