A 3rd straight day of chunky drops on both the wholesale gas & electricity markets on Thursday is a welcome way to enter the bank holiday weekend. The market always wins, it just sometimes takes time.
While retail prices remain higher than we would have liked it is a good time to commit for 12 months maximum if the commercials work for your business. Retail prices may drop 1p from the current levels before winter, with further increases expected before next summer when we are hoping for prices starting with an 18p/kWh for electricity. Gas is harder to forecast but low 4p/kWh should be doable in summer 2025.
On the generation front the price last week was £52.47/MWh. This is a good price when compared to the over £60/MWh seen only a few weeks ago. The reduction is driven by renewables which accounted for over 49% in the past week, with wind at 40%. Fossil fuel production was limited to below 15% which is good news as it subdues demand for gas and therefore helps to drive/keep the gas price down too. With the arrival today of a storm we expect good wind generation, albeit there is the well documented issue of getting it in to the grid because of an infrastructure bottleneck at the Borders.
If you would like to discuss your individual situation please contact me on 07768 421 901, or do feel free to email me at this address.
| Gas: Gas prices fell yesterday alongside the increase in wind generation and only receiving two LNG cargoes during August on the back of weak demand. Power: Power prices fell yesterday following the gas and carbon markets, with the carbon market impacting the further out curve. Day ahead wind generation is expected to generate 14.3GWs/day for the weekend, leading to less demand for gas for power demand. Oil: Oil prices fell yesterday, continuing to follow demand concerns. However, the losses were limited due to hopes of the US Federal Reserve cutting interest rates in the middle of September. Carbon (EU ETS): The ICE Dec-24 continued its descent to settle at €71.57/t yesterday. This morning the contract is trading up again, currently at €72.27/t. Carbon (UKAs): The ICE Dec-24 closed at £40.00/t yesterday, slightly down day on day. The contract has not yet traded at the time of writing this morning. |
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