Energy Wholesale Market Review, 31 July 2020

• Day-ahead power rose 11.1% to £35/MWh, supported by lower wind generation towards the end of the week.
• August 20 power climbed 4.3% to £31.7/MWh and September 20 power increased 2.4% to £33.7/MWh.

• Q420 power moved 0.5% higher to £42/MWh.
• The annual October 20 contract lost 0.7% to £41.86/MWh, 20.9% lower than the same time last year (£52.94/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 18.9% to £37.75/MWh.
• August 20 peak power gained 2.0% to £35.3/MWh, and September 20 peak power stayed at £37.28/MWh.

• The annual October 20 peak power contract lost 2.2% to £46.92/MWh.
• This is 21.3% lower than the same time last year (59.65/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal power contracts declined by 2.0% on average, this week.
• Winter 20 power lifted 0.4% to £44.72/MWh, while summer 21 power fell 1.9% to £39/MWh.

• All seasonal peak power contracts declined this week, down 2.8% on average.
• Winter 20 and summer 21 peak power dropped 1.6% and 3.0% respectively, falling to £51.23/MWh and £42.6/MWh.

Oil and Coal

Carbon

• Despite some minor volatility midweek, Brent crude oil prices held fairly steady to average $43.44/bl this week, 1.0% lower than the previous week.
• The largest driver of oil prices continues to be COVID-19, with the markets recently reacting bearishly to a rising number of cases around the world.
• Economic statistics, such as the latest publication of US GDP data, continues to limit gains in the Brent price, with low expectations of a full revival in global demand for the commodity anytime soon.
• Prices were upheld midweek as the EIA published data indicating the largest weekly drop in US oil inventories since December.
• Stock levels dropped by 10.6mn barrels as a result of fewer oil imports into the states.

• EU ETS carbon dropped again this week, as weak demand in EUA auctions saw prices move 4.0% lower to €25.84/t.
• More widely, the carbon price continues to draw influence from bearish equity markets and power demand amid COVID-19.
• API 2 coal prices fell by 1.3% this week to average $59.41/t, with uncertainty over the direction that global demand for the commodity will take.

Wholesale price snapshot