Wholesale gas and electricity prices dropped on Tuesday following a period of sustained increases.

There is now a clear curve from 1-5 year terms with one year contracts for electricity approaching £100/MWh and 110p/thm for gas. This is a reflection of the cold weather and ongoing geopolitical instability.

TPG’s view remains that retail prices for electricity will drop to below 20p/kWh in 2025. The outlook for gas is less clear going into 2025.

Gas: Gas prices softened yesterday with fundamentals remaining relatively bearish. This morning most gas contracts have traded down on last nights close. Power: Power contracts fell in price yesterday. An increase to forecast wind output next week put pressured Week 49 prices. The Dec24 Benchmark carbon contract fell in price yesterday, pressuring the front season. Trading this morning has opened slowly on power contracts. Oil: Prices were down yesterday as peace talks in the Middle East gather pace. News of potentially increased drilling in the US led to fears of a potential over supply, bringing further downside to the market. Carbon (EU ETS): The ICE Dec-24 closed at €69.23/t yesterday. The contract has fallen this morning trading at €68.19/t. Carbon (UKAs): The ICE Dec-24 closed at £37.12/t, ahead of last weeks close. At present the contract is trading similar to this time yesterday at £37.04/t

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