Energy Wholesale Market Review, 07 September 2018

Baseload electricity

• Day-ahead power rose 3.7% week-on-week to a fresh five-month high of £69.5/MWh.
• Prices have found support from a tighter market as planned maintenance restricts the French interconnector to 1.0GW capacity until 15 September.
• October 18 and November 18 power reached record highs of £70.3/MWh and £74.8/MWh respectively.

• The annual October 18 power contract gained 4.7% to end the week at a record high of £67.4/MWh (up from £64.4/MWh).
  The contract is £9.1/MWh (15.7%) higher than the same period last month, and 51.6% above the same time last year when it was £44.5/MWh.

Forward curve comparison

Annual October Contract

Peak electricity

• Day-ahead peak power gained 5.0% week-on-week to £74.0/MWh, £4.5/MWh above its baseload counterpart.
• Month-ahead peak power gained 2.4% to end the week at a fresh high of £75.9/MWh, £5.6/MWh above its baseload counterpart.

• Annual October 18 peak power increased 4.3% to £72.6/MWh, continuing to remain £5.2/MWh above its baseload power counterpart.
• The contract was 14.6% above its price last month (£63.4/MWh).

Forward curve comparison

Annual October Contract

Seasonal power prices

Seasonal baseload power contracts

Seasonal baseload power curve

• Week-on-week, seasonal contracts were up 3.4% on average.
• All seasonal baseload power contracts hit fresh highs this week.
• On 7 September, winter 18 power peaked at £73.9/MWh and summer 19 rose to £60.9/MWh.

• Week-on-week, seasonal peak power contracts increased 4.3% on average. Prices continue to be influenced by bullish gas and carbon prices.
• The winter 18 and summer 19 peak power contracts both gained 4.3% to £80.4/MWh and £64.9/MWh respectively.

Commodity price movements

Oil and Coal

Carbon

• The weekly average Brent crude oil price rose for the third consecutive week, gaining 3.5% to average $77.9/bl, up from $75.3/bl the previous week.
• Oil topped $79.0/bl on 4 September as oil platform evacuations began in the Gulf of Mexico ahead of tropical storm Gordon.
• API 2 coal rose 3.6% to average $94.2/t last week. API 2 coal rose to a fresh five-year high on 7 September of $96.0/t.

• EU ETS carbon prices rose for the eleventh consecutive week, increasing 3.0% to average €21.1/t.
• Prices started the week below €20.0/t on 3 September due to increased auctions volumes and the upcoming expiry of September options.
• EU ETS carbon hit a fresh 10-year high of €23.4/t on 7 September following the auction of 4.4mn EUAs in Germany at €22.5/t.

Wholesale price snapshot