Energy Wholesale Market Review, 6 September 2019

• Day-ahead power was down 5.7% to £37.0/MWh.
• The contract went as low as £30.6/MWh on 3 September, the lowest since 8 September 2016.
• October and November 19 power fell 4.1% and 2.5% to £40.9/MWh and £49.4/MWh respectively.

• The annual October 19 power contract lost 2.9% to end the week at £48.5/MWh.
• The contract is 8.0% below the same time last month (£52.7/MWh), and 18.9% lower than the same time last year (£59.8/MWh).

Forward curve comparison

Annual October Contract

• Day-ahead peak power was down 1.2% to £41.5/MWh, £4.5/MWh above its baseload counterpart.
• October 19 peak power lost 3.8% to £45.8/MWh.
• November 19 peak power was 2.0% lower at £57.0/MWh.

• Annual October 19 peak power was down 3.0% at £54.0/MWh, £5.5/MWh above its baseload power counterpart.
• The contract is 7.3% below its value this time last month (£58.2/MWh), and 12.4% below the same time last year when it was £66.4/MWh.

Forward curve comparison

Annual October contract

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal power contracts decreased, dropping 2.2% on average.
• Winter 19 power was down 3.8% at £50.5/MWh, the lowest since April 2018.

• Seasonal peak power contracts were 2.5% lower on average.
• Winter 19 peak power decreased 3.6% to £57.1/MWh.

Oil and Coal

Carbon

• Brent crude oil was down 1.4% to $59.3/bl.
• Oil prices fell early in the week, with within-day prices dropping to $57.3/bl on 3 September, as OPEC production cuts continue and the US-China trade war dents demand forecasts.
• However, prices were supported on 5 September following an announcement from the US EIA that US crude stocks fell for a third consecutive week, dropping 4.77mn barrels to 423mn barrels, the lowest since October 2018. Prices climbed to $62.3/bl, the highest since 2 August.
• API 2 coal prices were up 1.0% to average $64.2/t, the first weekly rise since the end of June. Coal stocks at the ARA terminals stood at 5.9mt on 2 September, falling from 6.1mt the week prior.

• EU ETS carbon prices were 2.5% lower to average €25.4/t.
• Within-day carbon prices dropped as low as €24.7/t on 3 September, the lowest since 20 June. Uncertainty around Brexit continues to weigh on carbon prices, with a no-deal Brexit expected to result in British emitters flooding the market with EUAs.
• Although prices were supported by a two-day auction pause in the middle of the week, prices dropped when auctions resumed on Friday with Germany auctioning 2.8mt of EUAs, while higher auction volumes this week (15.78mt) also pressured carbon prices.

Wholesale price snaphot