10th January 2025 Energy Price Alert – UK Gas & UK Electricity
Wholesale Gas and Electricity prices continued the downward trend of this week on Thursday, which was further welcome news.
On the generation front, 2024 was noteable because renewables, driven by wind, produced more Electricity for the UK than fossil fuels for the first time ever. This, combined with imports driven by opportunistic buying, enabled UK energy prices to remain subdued throughout the majority of 2024.
In the past week fossil fuels accounted for 34.9% of UK Electricity generation. Given the very high price of Gas at the moment this meant that the generated price for the past week was £136.58/MWh, which is double what we were seeing just 6 weeks ago. TPG’s view is that this is a blip given the wholesale price reductions of the past week, and so far we have not seen this have any impact on retail prices and tenders.
Gas: Gas prices fell yesterday due to additional supplies with elevated Norwegian gas and two new LNG cargoes bound for the UK, expected to arrive this weekend. The Langeled pipeline is now flowing at capacity after maintenance.
Power: Power prices softened throughout most of the curve yesterday, despite Day ahead prices surging upwards due to a well below average wind output of 6GWs, expected throughout the end of this week. Losses in the further out curve were driven by the declines in the gas market.
Oil: Oil prices continued to edge higher yesterday as a Russian oil depot in Volga was damaged after a Ukrainian drone attack. As the war continues, European energy infrastructure is at risk of being damaged, adding bullish pressure to prices.
Carbon (EU ETS): The ICE Dec-25 retraced the previous sessions losses and climbed back up to €73.46/t yesterday. The contract is currently trading at €72.81/t this morning.
Carbon (UKAs): The ICE Dec-25 fell to £34.19/t yesterday. The contract is trading at £34.20/t at the time of writing.
