Energy Wholesale Market Review, 4 December 2020

• Day-ahead power rose 115.3% to £110/MWh, following a substantial drop off in wind generation and forecast demand to increase into next week.
• January 21 power climbed 4.9% at £55.5/MWh and February 21 power increased 8.7% to £56.75/MWh.

• Q121 power moved 6.9% higher to £54.1/MWh.
• The annual April 21 contract rose 1.7% to £47.63/MWh, 2.4% higher than the same time last year (£46.53/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was up 169.2% to £175.00/MWh, following its baseload counterpart higher.
• January 21 peak power gained 5.4% at £64.07/MWh, and February 21 peak power increased 2.2% to £62.67/MWh.

• The annual April 21 peak power lost 1.1% to £52.71/MWh.
• This is 0.4% lower than the same time last year (52.93/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts boosted this week, up on average by 2.0%.
• Summer 21 and winter 21 expanded 2.0% and 1.4% respectively, rising to £44.46/MWh and £50.80/MWh.

• All Seasonal peak power contracts boosted this week, up 1.1% on average.
• Summer 21 and winter 21 peak power increased 1.6% and 0.8% respectively, falling to £48.22/MWh and £57.20/MWh.

Oil and Coal

Carbon

• Brent crude oil climbed for the fourth consecutive week, lifting 1.5% higher from the week prior to average $47.97/bl. Prices reached $49.23/bl on Friday 4 December, its highest since the beginning of March.
• Oil prices continued to rally on COVID-19 vaccination developments, creating a more positive demand outlook whilst also improving global equity markets.
• Further support was leant to prices with OPEC members agreeing to continue supply cuts to help combat demand concerns from the Coronavirus Pandemic. At the weeks start, select OPEC members had opposing views on market rebalancing which had prompted some concern, but appears to now have been resolved.
• API 2 coal gained 5.8% from the previous week to average $61.61/t.

• EU ETS carbon climbed for the fourth consecutive week, rising 5.7% to average €29.22/t this week. Prices reached a three-month high of €29.89/t on 4 December, boosted by forecasts of colder weather and the likelihood of a supply squeeze due to delays in 2021 auctions. Prices may continue to climb further still for the remainder of the year, supported by the same proposed auction delays.
• Carbon prices like many commodity markets will continue to find support from positive COVID-19 vaccination developments in parallel.

Wholesale price snapshot