Energy Wholesale Market Review, 6 December 2019

• Day-ahead power fell 25.4% to £37.00/MWh, following record-high LNG send-out and warmer than seasonal normal temperatures.
• January 20 power slipped 6.1% to £47.25/MWh and February 20 power decreased 4.8% to £47.50/MWh.

• Q120 power moved 6.6% lower to £46.45/MWh.
• The Annual April 20 contract lost 4.1% to £46.49/MWh, 13.8% lower than the same time last year (£53.94/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power fell 23.2% to £42.70/MWh, £5.70/MWh above its baseload counterpart.
• January 20 peak power declined 6.4% to £54.06/MWh, and February 20 peak power decreased 4.7% to £53.81/MWh.

• The Annual April 20 peak power contract lost 3.8% to 51.81/MWh.
• This is 15.0% lower than the same time last year (60.94/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts declined this week, down on average by 3.4%.
• Summer 20 power decreased 5.4% to £42.45/MWh, while winter 20 fell 3.1% to £50.53/MWh.

• All seasonal peak power contracts declined this week, down £3.3% on average.
• Summer 20 and winter 20 peak power dropped 5.1% and 2.6% respectively, falling to £46.21/MWh and £57.41/MWh.

Oil and Coal

Carbon

• Brent crude oil fell 2.3% to $62.24/bl.
• OPEC allies agreed to deepen oil supply cuts in the first quarter of 2020 by 500,000 barrels per day, though failed to commit to any change to oil supply for the rest of the year.
• The cut of 1.7mn barrels per day is equivalent to roughly 1.7% of the current global supply and are amongst some of the deepest cuts to supply this decade.
• API 2 coal lost 3.0% to $62.09/t, with prices 28.0% lower than the same time last year.

• EU ETS carbon slipped 0.8% to €24.54/t.
• With the ambition by the EU to become carbon neutral by 2050, the European Commission (EC) stated plans this week to extend the EU ETS to “all relevant sectors”.
• The scheme, which does not currently include the transport sector, will look to target emissions from shipping and reduce the number of free allowances given to airlines.

Wholesale price snapshot