Trump, Trade Wars and OPEC – Prices Ease

Near-term contracts rise, whilst seasonal contracts experience losses. Commodity prices ease, EU ETS carbon drop amid heavy selling.

Last week we saw near-term power and gas contracts increase, while their seasonal counterparts moved lower. Larger price movements were seen further along the curve, thanks to falling commodity prices. Falling costs of EU Emissions Trading Scheme allowances also contributed to this downward pressure, due to a decrease in demand following Trump’s decision to impose steel and aluminium tariffs. Brent crude oil also fell, with production cuts set to be relaxed by OPEC. Outside of the wholesale market, British ministers have agreed to fund a new nuclear plant in Anglesey this month, which could be a fifth cheaper than Hinkley Point. 

 

Oil Underpins Bullish Energy Prices

Oil and carbon prices reach fresh highs pulling gas and power prices higher. Contract For Difference changes will bring additional costs for customers. 

Last week we saw oil and carbon prices reaching fresh new highs while pulling gas and power prices higher. Brent Crude Oil prices have also reached their highest point in nearly four years from the potential impact of new US sanctions on Iranian oil exports. Gas prices will continue to rise due to the extension of an unplanned outage at one of Great Britain’s gas storage sites. Moving away from the wholesale market, the National Audit Office found that Contract For Difference changes will bring additional costs for customers. The changes will prove to benefit smaller projects in the industry. 

 

Commodity Prices Reach Multi-Year Highs, Gas and Power Follow

Oil reaches fresh highs, gas and power prices follow. Innovate UK launch smart energy fund for new business energy models. 

Last week we saw oil and carbon prices reach new multi-year highs with gas and power contracts following suit. The US President Trump’s decision to withdraw from the Iranian nuclear accord was the biggest news last week. There was a rare occurrence on Wednesday as day-ahead peak power contracts were lower than baseload power prices resulting from high levels of solar generation. Moving away from the wholesale market, Tidal Lagoon Power are looking for a 60-year Contract For Difference. The same strike price as Hinkley Point C will be given. 

 

Warm Weather Fades, Power Prices Rise

GB goes more than three full days without burning coal. Carbon prices could double by 2021. 

Last week we saw high levels of renewables output and record low levels of coal-fired generation. Spot energy prices still moved higher as colder temperatures increased demand towards the end of the week. Great Britain set another new record this week after going over three days without using coal to generate electricity. Moving away from the wholesale market, the price of EU Emissions Trading Scheme allowances fell last week. That price could double by 2021 due to reforms to reduce the number of surplus allowances in the market. 

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Prices Rise Amid Hottest April Day Since 1949

UK experienced it’s hottest April day since 1949. Great Britain achieves more than two full days without burning coal. 

GB reached a renewables milestone this week, after going more than two full days without coal-fired generation for the first time since the Industrial Revolution. High levels of wind and solar and warmer temperatures were to thank, and it’s expected that this milestone will be surpassed regularly throughout the summer. Seasonal power contracts in the wholesale market experienced gains, while carbon prices reached their highest price in seven years. 

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Gas and Power Supplies to Exceed Demand This Summer

National Grid’s Summer Outlook Report expects gas and power supplies to exceed demand this summer. All power, gas and commodity prices rise, with several contracts reaching multi-year highs. 

Last week we saw National Grid publish their Summer Outlook Report for 2018 which showed both gas and power supplies exceeding their demand. Despite all of this, all power, gas and commodities prices rose last week with several contracts reaching new multi-year highs. Moving away from the wholesale market, UK Research and Innovation announced a new fund to develop and test future smart energy systems. There will be up to £41.5mn available at the very first funding opportunity. 

 

Carbon Prices Hit Highest Since 2011

EU ETS carbon hit six-and-a-half year highs. BEIS statistics revealed over half of electricity generated in UK in 2017 came from low-carbon sources. 

Last week we saw all near-term power and gas contracts decrease while seasonal contracts reached fresh multi-year highs. These seasonal contracts were mainly driven higher by rising gas prices. Power prices were supported by the continued increase in EU ETS carbon prices which reached their highest price since June 2011. Moving away from the wholesale market, BEIS statistics showed that over half of electricity generated in the UK in 2017 came from low-carbon sources. This is a very promising statistic for the UK’s electricity generation mix. 

 

Carbon Prices Soar as UK Stays in EU ETS

Carbon prices reach their highest price since September 2011. 

It was an eventful week in the energy sector as carbon prices soared, power contracts hit multi-year highs, and National Grid confirmed Triad periods for the past winter. EU Emissions Trading System allowances surged to their highest price since September 2011, following the government’s announcement that it plans to stay in the program until the end of 2020. Increased emissions from coal-fired plants in Q118 also boosted prices, due to unseasonably cold weather conditions. 

 

Seasonal Power and Gas Contracts Reach New Highs

Worries of another cold snap pushes near-term gas and power contracts higher, whilst seasonal contracts reach fresh highs. Oil prices begin to reverse losses from the previous week. 

Last week we saw all near-term power and gas contracts experience gains as a result of worries of more cold weather. Seasonal power and gas contracts also reached fresh multi-year highs while carbon prices increased even more on the week before.  Moving away from the wholesale market, coal-fired power stations were running at high levels because of the higher near-term gas prices. This showed that coal still has a role to play in the UK’s generation mix in the short-term. 

 

Seasonal Power and Gas Contracts Reach New Highs

Day-ahead power and gas revert to norm after spiking in the previous week, whilst seasonal contracts and carbon prices reach new highs. Analysis shows UK carbon emissions in 2017 drop to lowest levels since 1890. 

Last week we saw day-ahead power and gas prices fall back to normal levels after considerable spiking the week before. Seasonal power and gas contracts along with carbon prices reached new highs after experiencing losses in the previous week. Outside of the wholesale market, recent analysis showed that the UK’s carbon emissions in 2017 had fallen to their lowest levels since 1890 which was primarily as a result of the reduction in coal use last year.