2nd May 2025 Energy Price Alert – UK Gas & UK Electricity
Wholesale Gas and Electricity prices continued to drop on Thursday, and we expect the situation to continue. The impact is primarily on near-term contracts, and is making the pricing curve flatter than it has been in recent months.
On the generation front prices were pretty stable with energy at £76.53/MWh in the past week with renewables, nuclear and biomass making up over 50% of total production. We continue to sign contracts below 20p/kWh for Electricity and expect this situation to continue, albeit it is always dependant on credit and sector.
Gas: Gas prices softened yesterday. Near curve prices fell due to strong renewable output, decreasing demand for gas-fired generation. A proposal from Germany to lower domestic storage targets signalled the continual push to lower injection demand, easing pressure on the curve.
Power: Power prices fell yesterday. Prompt prices fell amidst strong renewable generation, with forecasts showing an average output of 8.6GWs/day and 2.9GWs/day for wind and solar respectively. Curve prices fell shadowing the gas market.
Oil: After a bearish start yesterday, where oil prices lost $2/barrel, losses were erased in the afternoon trading. The decline was due to reports of OPEC+ not adjusting their production and feeding into the oversupply concerns. The afternoon bullishness could be seen as the market correcting itself due to the steep declines over the past week, but prices were also supported by positive economic news from the US, with Meta and Microsoft posting strong earnings reports, boosting US equities.
Carbon (EU ETS): The ICE Dec-25 rose at €67.02/t yesterday. The contract is currently trading at €67.17/t after opening at €67.21/t, with a low of €66.82/t so far this morning.
Carbon (UKAs): The ICE Dec-25 rebounded up to £47.96/t yesterday. The contract has yet to trade at the time of writing.
