Energy Wholesale Market Review, 7 December 2018

Baseload electricity

• Day-ahead power rose 6.9% to £64.7/MWh.
• January 19 power dropped 6.0% to £62.0/MWh and February 19 power lost 5.8% to £62.2/MWh.

• Annual April 19 power decreased 1.3% to £58.3/MWh.
• The contract is 0.8% below the same time last month when it was £58.7/MWh.

Forward curve comparison

Annual April Contract

Peak electricity

• Day-ahead peak power jumped 11.8% week-on-week to £73.3/MWh. This was £8.6/MWh above its baseload counterpart.
• Month-ahead peak power went down 4.8% to end the week at £69.7/MWh, £6.7/MWh above its baseload counterpart.

• Week-on-week, annual April 19 peak power went down 1.6% to £63.8/MWh. The contract was £5.6/MWh above its baseload power counterpart.
• The contract was 1.0% below its price last month (£64.5/MWh) and 31.0% higher than its value last year (£48.7/MWh).

Forward curve comparison

Annual April Contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• All seasonal baseload power contracts decreased week-on-week.
• Summer 19 power fell 1.7% to £55.3/MWh and the winter 19 contract slipped 1.0% to £61.3/MWh.

• All seasonal peak power contracts decreased this week, down 1.0% on average.
• Prices followed their gas counterparts, with seasonal gas contracts 0.7% lower on average.

Commodity price movements

Oil and Coal

Carbon

• The weekly average Brent crude oil price increased 1.7% to average $61.3/bl.
• On Friday, OPEC and non-OPEC members agreed to cut oil production by 1.2mn bl/d from 2019. OPEC members will cut production by 800,000 bl/d, whilst the remaining 400,000 bl/d will be met by non-OPEC nations such as Russia.
• API 2 coal prices gained 2.0% to average $86.3/t, supported by increased European demand with the recovery of water levels on the Rhine river.

• EU ETS carbon prices lifted 0.7% to average €20.0/t.
• Last week, the EU Commission announced that Poland will auction an additional 55.8mn EUAs in 2019 after it had not allocated 113mn allowances between 2013-17. This announcement weighed on carbon prices, which dropped as low as €18.0/t on 6 December.

Wholesale price snapshot