Energy Wholesale Market Review, 31 August 2018

Baseload electricity

• All near-term baseload power contracts continued to experience upwards momentum this week.
• Day-ahead power rose 2.7% week-on-week to £67.0/MWh.
• The contract hit a fresh five-month high of £68.9/MWh.
• September and October 18 power gained 4.5% and 3.1% to £67.8/MWh and £67.9/MWh respectively.

• The annual October 18 power contract gained 2.8% to £64.4/MWh (up from £62.7/MWh). The contract hit a record high of £64.7/MWh on 30 August.
• The contract is £7.5/MWh (13.2%) higher than the same period last month, and 47.7% above the same time last year when it was £43.6/MWh.

Forward curve comparison

Annual October Contract

Peak electricity

• Day-ahead peak power gained 1.1% week-on-week to £70.5/MWh. This was £3.5/MWh above its baseload counterpart.
• Month-ahead peak power gained 4.2% to £71.3/MWh, £3.5/MWh above its baseload counterpart.

• Week-on-week, annual October 18 peak power increased 2.5% to £69.6/MWh. The contract is £5.2/MWh above its baseload power counterpart.
• The contract was 12.4% above its price last month (£62.0/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 2.8%
  on average.
• All seasonal baseload power contracts hit fresh highs this week.
• On 30 August, winter 18 power peaked at £70.7/MWh and summer 19 rose to £58.8/MWh.

• Week-on-week, seasonal peak power contracts increased 1.8% on average. Prices have continued to find support from bullish gas and carbon prices.
• The winter 18 and summer 19 peak power contracts gained 2.6% and 2.3% to £77.1/MWh and £62.2/MWh respectively.

Commodity price movements

Oil and Coal

Carbon

• The weekly average Brent crude oil price rose for the second consecutive week, gaining 2.5% to average $75.3/bl, up from $73.5/bl the previous week.
• Prices started the week up at $76.7/bl, before rising to $77.4/bl on 30 August following news of a 2.6mn barrel withdrawal in US crude stocks.
• API 2 coal rose 1.8% to average $91.0/t this week. Prices rose to $93.3/t, a five-year high on 28 August.

• EU ETS carbon prices rose for the tenth consecutive week, increasing 4.9% to average €20.5/t, up from €19.5/t the previous week.
• Prices started the week at €21.8/t on 27 August, supported by low auction volumes on the bank holiday, before easing in the middle of the week to below €21.0/t.

Wholesale price snapshot