5th July 2024 Energy Price Alert – UK Gas & UK Electricity

Wholesale gas and electricity prices unexpectedly rose on Thursday due to a Norwegian outage but we expect the impact to be short-lived.  Market reacts in the way it used to despite the fundamentals being different, in this case UK stocks at 84%.  

At a retail level, as always depending on credit and sector, we are seeing gas prices getting down towards 4p/kWh and electric prices around 20p/kWh.  

On the generation side, with renewables at 43.5% last week, the price dropped below £60/MWh.  This large drop from the previous week was supported by a lower level of transfers and also fossil fuels being below 20%.  This is welcome news and augurs well for the future.  

With the election result now clear, it will be interesting to see how quickly the new Government is able to crack on with its plans for zero carbon in the UK by 2030.  The risk is that if there is significant infrastructure required then the cost of this will pass through into bills.  The good news is that renewables are generally lower cost energy than fossil fuels, so there is a possibility that prices will continue to drop.

Gas: Gas prices rose yesterday following an unplanned outage at a Norwegian gas field, which was caused by a compressor failure.

Power: Power increased in line with the higher gas price. Wind generation output is expected to remain high across the next few days.

Oil: Oil prices continued to edge upwards, following the large US stock withdrawal announced on Wednesday. Prices are now at their highest level since April.

Carbon (EU ETS): The ICE Dec-24 traded relatively flat yesterday, settling at €70.26/t.

Carbon (UKAs): The ICE Dec-24 moved higher to £46.50/t yesterday. The contract is up again this morning, currently trading at £47.20/t.

#gas #electricity #businessutilities #businessgas #businesselectricity

The Procurement Group

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