Energy Wholesale Market Review, 4 June 2021

• Day-ahead power rose 1.4% to £74.00/MWh, due to forecasts of low wind output in the coming weeks and a rise in gas prices.
• July 21 power climbed 0.2% to £73.40/MWh and August 21 power grew 0.1% to £72.55/MWh.

• Q321 power was largely unchanged, easing 0.1% to £73.50/MWh.
• The annual October 21 contract dropped 1.0% to £69.00/MWh, 57.4% higher than the same time last year (£43.83/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power followed its baseload counterpart higher, rising 5.1% to £78.00/MWh.
• July 21 peak power gained 5.6% to £79.45/MWh, and August 21 peak power increased 2.6% to £78.75/MWh.

• Annual October 21 peak power lost 2.0% to £78.90/MWh.
• This is 59.8% higher than the same time last year (£49.38/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined this week, down on average by 1.7%.
• Winter 21 power decreased 0.6% to £80.50/MWh, while summer 22 lost 1.5% to £57.50/MWh.

• Most seasonal peak power contracts fell this week, down 0.9% on average.
• Winter 21 peak power dropped 1.1% to £94.00/MWh, while summer 22 peak power increeased 6.8% to £63.80/MWh.

Oil and Coal

Carbon

• Brent crude oil gained 3.5% to average $70.91/bl, reaching a fresh two-year high of $71.64/bl on Friday.
• Prices found support this week from signals of a healthier demand outlook, with OPEC+ members agreeing to go ahead with plans to gradually increase output in July. Additionally, the EIA reported a fall in crude stocks of 5.08mn bbl in the week ending 28 May.
• Elsewhere, eyes will turn to any potential Iranian nuclear deal, which could see a relaxation on its current oil export ban.

• EU ETS carbon dropped 2.4% to average €51.37/t. Its UK counterpart ended the week at £45.57/t, down 5.5% from the previous week.
• Stronger renewables output at the week’s start dampened carbon prices across both markets, but most notably on the EU ETS.
• Similarly, stronger performing international commodity markets continued to feed through into carbon markets.
• Carbon markets will see continued support from more ambitious EU and UK climate targets and vaccination progress, though COVID-19 will continue to bring uncertainty.

Wholesale price snapshot