Energy Wholesale Market Review, 31 January 2020

• Day-ahead power fell 11.0% to £31.50/MWh, as consistently high wind generation weighed on prices.
• February 20 power slipped 8.1% to £34.00/MWh and March 20 power decreased 5.0% to £34.20/MWh.

• Q220 power moved 3.3% lower to £34.67/MWh.
• The Annual April 20 contract lost 3.2% to £38.75/MWh, 27.2% lower than the same time last year (£53.26/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was down 7.1% to £37.15/MWh, following its baseload counterpart lower.
• February 20 peak power declined 5.5% to £39.75/MWh, and March 20 peak power decreased 4.9% to £37.95/MWh.

• The Annual April 20 peak power lost 2.9% to 44.08/MWh.
• This is 26.2% lower than the same time last year (59.71/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 4.5%.
• Summer 20 power decreased 3.1% to £34.80/MWh, while winter 20 fell 3.3% to £42.70/MWh.

• All seasonal peak power contracts declined this week, down £3.7% on average.
• Both summer 20 and winter 20 peak power dropped 2.9%, falling to £38.60/MWh and £49.55/MWh, respectively.

Oil and Coal

Carbon

• Brent crude oil fell by 7.3% to average $58.91/bl, as prices were generally more stable this week, with the EIA reporting lower than expected US crude inventories. However, prices fell to a fresh three-month low on Friday of $58.34/bl as the World Health Organisation (WHO) announced the coronavirus to be a global health emergency.
• With an estimated 10,000 people infected worldwide by the virus, travel to and from China has become increasingly restricted, lowering oil consumption. Despite the opposition of the WHO to imposed travel restrictions, investors fear that as the virus continues to spread, a reduction in global travel could significantly reduce global oil consumption. US crude exports to North Asia fell by 27% week-on-week on 31 January.

• API 2 coal was unchanged this week, averaging only $0.01/t lower at $60.51/t. German company Uniper announced this week that they are closing 2.9GW of coal facilities.
• EU ETS carbon reversed previous weeks’ gains to fall this week, lowering 3.8% to average €24.03/t, finishing the week at €23.53/t as Britain left the European Union on 31 January. The exit is not expected to impact markets, with any anticipated changes to pricing already factored into the EU ETS prices.

Wholesale price snapshot