Wholesale Gas and Electricity prices rose sharply on Thursday, as a result of legal action in Austria to stop them importing Russian Gas. The reason the prices rose is that if Austria can’t get its Gas from Russia then it will dip into EU and British supplies to fill the gap.

As the weather gets colder we can see the impact immediately on the generation front. Last week the generation cost was £99.06/MWh, with Gas accounting for 47% of UK production. Renewables accounted for just 20% last week. The high price is being driven by increasing Gas prices.

TPG’s view is that this volatility is to be expected during the Winter, which is why we encourage our clients to contract during the Summer when forward booked prices are lower.

Gas: Gas prices climbed higher yesterday as OMV, an Austrian Gas company, won its arbitration against Russia’s Gazprom, which has concerned traders that Gazprom will limit the amount of Gas to Austria, lifting EU and British gas prices.   Power: Power prices continued to track the gas market. UK nuclear generation has averaged 4.7GWs/day so far this month, 0.7GWs/day below the 2019-2023 average.   Oil: Oil prices rose yesterday as EIA statistics showed a 4.4million barrel decrease in motor gasoline inventories, showing an increase in demand. Furthermore, improving US employment data provided additional hope of increasing demand.   Carbon (EU ETS): The ICE Dec-24 increased to €68.27/t yesterday. The contract is currently trading slightly downwards at €68.12/t.   Carbon (UKAs): The ICE Dec-24 rose to £38.24/t last night. The contract is currently trading slightly higher at £38.42/t this morning.

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