Energy Wholesale Market Review
Energy Wholesale Market Review Week Ending 23rd December 2022
This week saw the continuation of lowering gas and power prices, moving down further from bearish price points set a fortnight ago. As we head to the Christmas period, demand is generally trending lower with the closure of industrial plant. Similarly, we are also observing slightly warmer temperatures compared with recent weeks which is also supressing demand slightly. Subsequently, day-ahead gas fell 41.8% to 173.00p/th, following much milder weather, lower demand levels and a steady supply of LNG continuing to reach UK shores. Day-ahead power fell 25.3% to £145.00/MWh, following the bearish movements of its equivalent gas contract. January 23 gas was down 31.7% at 209.00p/th, and February 23 gas decreased 30.1% to 217.50p/th. All seasonal gas contracts declined last week, down by 19.5% on average, as summer 23 and winter 23 gas dropped 25.8% and 24.6% respectively, subsiding to 224.00p/th and 238.00p/th. Like gas, all seasonal power contracts declined this week, down on average by 17.3%. Summer 23 power decreased 21.9% to £216.00/MWh, while winter 23 fell 19.3% to £246.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 23rd December 2022.
Energy Wholesale Market Review Week Ending 16th December 2022
This week saw the reversal of previous consecutive weeks of largely bullish contract movements across both gas and power. This week in particular saw the softening of supply margins, weighing on a lot of the gains from the previous week, particularly in the near-term. We do however, continue to observe strong price disparity between day-ahead contracts and those further out on the forward curve, albeit this deficit has narrowed somewhat this week. Day-ahead gas fell 17.0% to 297.00p/th, helped by the strong influx of LNG continuing to reach UK landing terminals and higher wind outturn, easing demand for gas-fired assets to help bridge the supply/demand gap. Like gas, day-ahead power fell 50.8% to £194.00/MWh, with a significant contributor of this week-on-week decline driven by a £155.00/MWh drop on Friday 16 December versus the day previous – as we expect to see strong wind outturn early next week. Elsewhere, January 23 gas was down 10.8% at 306.00p/th, and February 23 gas decreased 10.4% to 311.00p/th. All seasonal gas contracts declined this week, down by 6.8% on average. Like gas, all seasonal power contracts saw losses this week, down on average by 6.2%, as summer 23 power decreased 8.7% to £276.50/MWh, while winter 23 fell 9.8% to £305.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 16th December 2022.
Energy Wholesale Market Review Week Ending 9th December 2022.
This week saw the continuation of bullish price movements across most gas and power wholesale contracts. We continue to note ongoing pricing disparity between day-ahead contracts and those further out on the forward curve, with contracts into Q1-23 generally higher than shorter dated contracts. Subsequently, we saw the majority of gas and power contracts rise week-on-week. Day-ahead gas rose 8.5% to 358.00p/th, following the continuation of colder temperatures encouraging higher demand from gas-fired assets to meet higher trending demand. Day-ahead power rose 11.0% to £394.00/MWh, mirroring trends set from its gas equivalent contract and helped further by lower levels of wind generation currently being experienced more generally. Furthermore, January 23 gas was up 1.2% at 343.00p/th, and February 23 gas increased 0.9% to 347.00p/th. The majority of seasonal gas contracts saw gains this week, up by 3.3% on average, while both summer 23 and winter 23 gas increased 3.4% and 2.9% respectively, lifting to 339.00p/th and 352.00p/th. Like gas, most seasonal power contracts boosted this week, up on average by 2.4%, as summer 24 power rose 3.4% to £230.00/MWh, while winter 24 climbed 6.3% to £255.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 9th December 2022.
Energy Wholesale Market Review Week Ending 2nd December 2022
This week saw the continuation of bullish price movements across gas and power wholesale contracts, but we continue to note the ongoing pricing disparity between day-ahead contracts and those further out on the forward curve. Day-ahead gas rose 117.1% to 330.00p/th, with notably colder temperatures observed this week, driving demand higher for more expensive forms of generation such as CCGT’s and gas peaking plant. Similarly, day-ahead power rose 39.2% to £355.00/MWh, driven by tight system margins. On Tuesday 29 November, National Grid ESO issued a Capacity Market Notice (CMN), amid expectations that demand would outstrip supply by 177MW from 7pm. This saw N2EX day-ahead hourly prices of £1,000/MWh for the evening. The CMN was subsequently cancelled later that day, however. Elsewhere, January 23 gas was up 6.9% at 339.00p/th, and February 23 gas increased 4.7% to 344.00p/th. All seasonal gas contracts boosted last week, up by 5.7% on average, while both summer 23 and winter 23 gas increased 7.9% and 7.0% respectively, lifting to 328.00p/th and 342.00p/th. Like gas, all seasonal power contracts rose this week, up on average by 6.6%, as summer 23 and winter 23 expanded 9.4% and 7.3% respectively, rising to £303.00/MWh and £338.00/MWh.
Wholesale price snapshot – Friday-on-Friday
Energy Wholesale Market Review Week Ending 2nd December 2022.
Written By Graham Paul
