Energy Wholesale Market Review, 4 October 2019

• Day-ahead power rose 6.8% to £42.7/MWh, following its gas counterpart higher.
• Month-ahead power fell 4.6% to £49.5/MWh and December 19 power dropped 3.6% to £52.3/MWh.

• Q120 power decreased 4.0% to £54.5/MWh.
• The annual April 20 power contract dropped 2.7% to end the week at £50.3/MWh. This is down 13.2% lower than the same time last year (£57.9/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power lifted 0.8% to £46.9/MWh, £4.2/MWh above its baseload counterpart.
• November 19 peak power lost 4.8% to £56.7/MWh.
• December 19 peak power lowered 2.8% to £58.7/MWh.

• Annual April 20 peak power was 5.3% lower at £55.9/MWh, £5.6/MWh above its baseload power.
• The contract is 3.9% above its value this time last month (£56.0/MWh), but 11.4% below the same time last year when it was £63.1/MWh.

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal baseload power contracts fell, dropping 4.1% on average.
• Summer 20 power declined 5.8% to £46.7/MWh, while winter 20 lost 4.4% to £53.8/MWh.

• Seasonal peak power contracts were 3.9% lower on average.
• Summer 20 peak power declined 5.7% to £50.8/MWh.

Oil and Coal

Carbon

• Brent crude oil fell 6.3% to average $59.1/bl.
• Within-day day oil prices approached a two-month low on 3 October, dropping to $57.7/bl.
• Oil prices were pressured by news that Saudi Arabian production recovered to full output (11.3mn bpd) following last month’s drone attacks.
• API 2 coal prices were down 2.8% to $65.7/t.
• Coal dropped as low as $64.8/t on 3 October, a near one-month low.
• Weaker demand and high coal stocks at ARA terminals pressured prices, while higher wind generation in Germany last week pushed coal generation out of the generation mix.

• EU ETS carbon fell 4.9% to average €24.3/t.
• Prices dropped to a fresh six-month low of €23.3/t on 4 October, pressured by fears of a no-deal Brexit, and the likelihood that unauctioned EUAs will flood the market.
• Concerns of recessions in Germany and the UK also drove prices lower, impacting longer-term EUA buying. These concerns combined with higher wind generation on the continent last week, resulted in lower demand for EUAs at auctions.

Wholesale price snaphot