Wholesale prices reversed the trends of this week on Thursday and rose markedly for Day Ahead contracts and showed mixed signals, all calm, for all periods forward from March ’24.
We are seeing retail contracts at around 25p/kWh including standing charge on electricity, with unit only retail prices below 20p/kWh for night use. Gas contracts remain in the 7p-8p/kWh range.
In terms of generation, on the lower chart, this past week was very expensive at over £100/MWh driven by renewables being at the very low level of 26% vs fossil fuels at 46.2%. This is not untypical of winter generation and is what leads to such volatilty.
The outlook remains positive with price reductions still expected due to the strong stocks and free supply of LNG which is the primary fossil fuel used for generation.
| Gas: As the front month closed yesterday, prices rose in the prompt. A low Wind output combined with an increased heating demand due to the cold snap, supported the gains. The UK expects to receive 6 LNG cargoes by the 10th of December, keeping supplies healthy. Power: Power prices increased throughout the near curve yesterday as Wind generation fell to 1.1GWs, leading to an increased demand for fuel-fired generation. Coal price increases and Carbon declines net neutral movement for the further out curve. Oil – Oil prices rose yesterday following the announcement of further supply cuts from OPEC+ which are expected to last until at least the end of the first quarter of 2024. However African members of OPEC+ had raised their targets for production, providing scepticism within market participants. Carbon (EU ETS): The ICE Dec-23 traded down to €70.80/t yesterday. Opening at €70.66/t this morning, the contract has seen a bullish trajectory and is currently trading at €71.59/t at the time of writing. Carbon (UKAs): The ICE Dec-23 fell to £40.59/t during yesterday’s session. Opening today at £41.00/t, the contract has softened to £40.80/t at the time of writing. |
