Energy Wholesale Market Review, 5 February 2021

• Day-ahead power fell 13.3% to £62.00/MWh, following increased wind generation, particularly at the week’s start.
• March 21 power slipped 4.1% to £59.00/MWh and April 21 power increased 8.4% to £55.75/MWh.

• Q221 power moved 5.6% higher to £56.35/MWh.
• The annual April 21 contract rose 2.8% to £57.15/MWh, 36.3% higher than the same time last year (£41.93/MWh).

Forward curve comparison

Annual April Contract

• Day-ahead peak power was down 21.8% to £68.00/MWh, following the baseload contract lower.
• March 21 peak power declined 8.3% to £62.79/MWh, and April 21 peak power decreased 0.7% to £59.93/MWh.

• The annual April 21 peak power contract lost 0.2% to £62.14/MWh.
• This is 30.9% lower than the same time last year (47.46/MWh).

Forward curve comparison

Annual April contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts rose this week, up on average by 2.7%.
• Summer 21 and winter 21 power expanded 1.9% and 3.7% respectively, rising to £53.49/MWh and £60.81/MWh.

• Most seasonal peak power contracts climbed this week, up 1.4% on average.
• The summer 21 contract dropped 0.4% to £56.29/MWh, while winter 21 peak power increased 0.8% to £67.99/MWh.

Oil and Coal

Carbon

• Brent crude oil rose again this week, up 3.3% to $57.76/bl.
• The resurgence in COVID-19 global case numbers continues to loom over the majority of commodity markets, fuelling market uncertainty and demand concerns. However, Brent crude continues to remain resilient.
• The market responded well to major crude producers demonstrating they were keeping in line with their output commitments, as a mechanism to combat market oversupply.
• API 2 coal fell 2.0% from the previous week to average $66.34/t.

• EU ETS carbon prices grew this week, rising 5.9% to average €35.46/t.
• Like other commodity markets, high case numbers of COVID-19 across Europe continued to act bearishly on the carbon price. The introduction of increased EUA auction volumes this week pressurised the market, with the market soaking up over 15.1mn EUA’s.
• Impending cold weather forecast across much of Europe and the UK will likely offer some support to prices, as well as a consequential rise in fossil.

Wholesale price snapshot