Energy Wholesale Market Review, 6 November 2020

• Day-ahead power rose 25.0% to £44.7/MWh, amid generally low wind output observed over the course of the week, coupled with periods of high offline thermal capacity which consequently led to tight supply margins.
• December 20 power slipped 1.2% at £47.2/MWh and January 21 power increased 5.8% to £53.06/MWh.

• Q121 power moved 1.8% lower to £49.6/MWh.
• The annual April 21 contract rose 1.1% to £46.03/MWh, 3.6% lower than the same time last year (£47.75/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was up 3.1% to £49.50/MWh, following, following its baseload counterpart higher.
• December 20 peak power declined 2.2% at £54.26/MWh, and January 21 peak power decreased 0.8% to £58.48/MWh.

• The annual April 21 peak power lost 1.5% to £52.09/MWh.
• This is 3.5% lower than the same time last year (54/MWh).

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts grew this week, up on average by 1.5%.
• Summer 21 and winter 21 expanded 1.8% and 0.5% respectively, rising to £43.15/MWh and £48.91/MWh.

• All seasonal peak power contracts increased this week, up 1.7% on average.
• Summer 21 and winter 21 peak power increased 2.1% and 0.9% respectively, rising to £47.88/MWh and £56.29/MWh.

Oil and Coal

Carbon

• Brent crude oil remained relatively static last week, averaging $39.76/bl. In recent weeks, the Brent crude price has remained relatively stable sitting above the $40.00/bl mark.
• Prices have been afflicted by recent widespread lockdown announcements throughout Europe, weighing on demand. Similarly, global cases of coronavirus continue to increase daily, generating underlying uncertainty within the market.
• Assurances from OPEC in providing support to prices with supply cuts had acted to lift prices last week but it remains unclear whether this type of support mechanism will be robust enough to outweigh the ever growing concerns of demand fears.
• API 2 coal declined, falling 5.6% to average $54.24/t for the week.

• EU ETS prices rose last week. Prices increased by 3.5% to average €24.43/t, lifting above recent price trends in the last fortnight where prices have remained within the €23.00/t benchmark.
• The carbon market followed other global commodity markets higher, as the U.S. presidential elections remain in deadlock.
• Carbon markets will likely be subject to a degree of volatility as the outcome of the elections remains unclear.
• Gains have also been driven by speculative buying from market participants, along with a looming drop in EUA supply.

Wholesale price snapshot