30th August 2024 Energy Price Alert – UK Gas & UK Electricity
On Thursday wholesale Gas and Electricity prices fell.
On the generation front, the price rose to 75.50p/MWh as a result of fossil fuels contributing 24.2% of the overall requirement. Bizarrely, we have a problem in the UK in terms of getting electricity out of Scotland. There is a log jam at the borders for this. This is because the pace of installation of wind turbines north of the border has outpaced the National Grid infrastructure to transport the energy down to higher using consumers south of the border. Presumably the Government will deal with this, but at the moment it means that wind from Scotland can get paid to be turned off while we burn fossil fuels: that itself is a nonsense.
At retail we are seeing prices in the 4p/kWh range for Gas, and 22p/kWh range for Electricity.
Gas: Gas prices fell yesterday as demand fell. The UK gas grid was expecting to close 9.7MCM long yesterday. However, price declines were limited due to the expectation of an increased demand next week, brought about by lower renewable output causing a rise in gas for power demand.
Power: Power prices fell yesterday, tracking the gas market. Despite the losses, wind generation is forecast to produce 5.7GW/day next week, which is 20% below seasonal norms. This is likely to increase gas for power demand in the day ahead contract.
Oil: Oil prices rose yesterday as traders took advantage of the sub $80/barrel benchmark, with further support from Libya’s shutdown of several oilfields, reducing supplies by 800,000 barrels/day.
Carbon (EU ETS): The ICE Dec-24 closed at €71.06/t yesterday. This morning the contract has peaked at €71.35, but is currently trading at €70.91/t.
Carbon (UKAs): The ICE Dec-24 closed upwards at £42.21/t yesterday. The contract has not yet traded at the time of writing.
