6th September 2024 Energy Price Alert – UK Gas & UK Electricity
On Thursday wholesale Gas prices rose, while Electricity prices fell. It would be nice to think that as the UK becomes less dependant on Gas that this will become a more common theme.
At a retail level this week we have seen contracts fractionally below 20p/kWh in some instances, but more generally between 20p and 20.5p/kWh for Electricity and 5p/kWh where credit and sector allow.
Last week saw the highest price for Electricity generation in many months at £81.88/MWh. This despite fossil fuels and renewables both producing the same amount at around 30% of the requirement. The Gas prices still have a disproportionate effect on UK Electricity prices, but should what the new Government have promised come to pass that should be a thing of the past within the next five years as the UK builds its own Electricity generation network, primarily with a combination of onshore and offshore wind farms. Quite how this weeks auction process for offshore wind farms will pan out is unknown, but in years to come expect there to be issues over the guarantees given to the 131 successful projects.
Gas: Gas prices rose yesterday following the continued maintenance of the Norwegian gas fields and limited LNG cargo deliveries. However, with rising wind generation, the UK ended yesterdays session 4.6MCM oversupplied, providing resistance to further gains.
Power: Power prices fell in the near term due to an upward revision in wind generation. However, losses were limited due to rising gas prices.
Oil: Oil prices were volatile yesterday as OPEC+ announced a delay to their October output increase, providing upward pressure for the market. But weak demand concerns from China and the US, brought in bearish influence causing OPEC+’s delay as the additional supplies would not sell.
Carbon (EU ETS): The ICE Dec-24 continued its bearish run and closed at €66.20/t yesterday. The contract has gained some support this morning and is currently trading at €67.05/t.
Carbon (UKAs): The ICE Dec-24 crept upwards to £41.99/t yesterday. The contract is currently trading at £41.8/t this morning.
