Energy Wholesale Market Review, 9 November 2018

Baseload electricity

• Day-ahead power rose 0.6% to £61.3/MWh.
• Prices dropped to a 14-week low of £56.9/MWh on 6 November amid higher wind generation forecasts.
• December 18 and January 19 power rose 2.3% and 2.2% to £63.6/MWh and £65.0/MWh respectively.

• Annual April 19 power gained 2.6% to £58.7/MWh, having fallen to an 11-week low of £57.0/MWh on 5 November.
• The contract is 3.2% below its level last month, when it was £60.7/MWh.

Forward curve comparison

Annual October Contract

Peak electricity

• Day-ahead peak power fell 2.2% week-on-week to £65.6/MWh. This was £4.3/MWh above its baseload counterpart.
• Month-ahead peak power went up 0.5% to end the week at £70.3/MWh, £6.7/MWh above its baseload counterpart.

• Week-on-week, annual April 19 peak power went up 1.8% to £64.5/MWh. The contract was £5.8/MWh above its baseload power counterpart.
• The contract was 3.0% below its price last month (£66.5/MWh) and 28.3% higher than its value last year (£50.3/MWh).

Forward curve comparison

Annual October Contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Seasonal baseload power contracts increased 2.0% on average.
• Summer and winter 19 power went up 2.5% and 2.7% to £55.6/MWh and £61.9/MWh respectively.

• Most seasonal peak power contracts increased this week, up 2.3% on average.
• Prices followed their gas counterparts; with seasonal gas contracts 1.2% higher on average.

Commodity price movements

Oil and Coal

Carbon

• The weekly average Brent crude oil price fell for a fifth week, dropping 4.6% to average $72.1/bl, down from $75.6/bl the previous week.
• Oil prices dropped to a six-month low of $69.2/bl on 9 November, the lowest since April as recent concerns of a tight market have turned to worries of oversupply in 2019.
• This has led to OPEC considering the potential for a return to production cuts, with a technical meeting of officials from OPEC and allies to take place in Abu Dhabi on 10-11 November.
• API 2 coal prices dropped 4.0% to average $90.3/t, down from $94.1/t the previous week.
• Prices ended the week at $88.5/t, a 12-week low.

• EU ETS carbon prices recovered, surging 11.4% to average €18.2/t.
• Prices recovered from a four-month low of €15.2/t on 1 November, to reach $19.9/t on 9 November.
• Prices have made a relatively quick recovery after the recent fall, with the upcoming Market Stability Reserve in January 2019 expected to provide further support in the coming weeks.

Wholesale price snapshot