News / Weekly Energy Report - Wider fuels commodities weaken UK power curve

Weekly Energy Report - Wider fuels commodities weaken UK power curve

8th May 2019

Stay updated on weekly changes in the energy market with the Haven Power market report. Here’s a summary of the last 7 days, starting Monday 29th April:

  • UK power curve weakens, but ends week on a strong note.
  • Large swings in wind generation direct the prompt market.
  • Embedded generators utilised by national grid to balance the system.
  • UK gas market likely to remain bearish with warmer temperatures and more LNG due.

Read more below:

Prompt/Day-ahead Power

The price for day-ahead baseload delivery during week 18 was highest for delivery on 1st May when wind output was forecasted by National grid to be around 700MW, half of what it had been for the 30th April. This lack of wind supported the day-ahead product, resulting in the high price of the week of £45.27/MWh. The premium compared to the previous day came from an increase in output from gas plant; coal-fired generation featured, but to a very limited extent.

The lowest price over week 18 was for delivery on 4th May, when demand on the UK system was expected to be lower, and wind output was predicted to increase considerably. This increase in relatively cheap wind generation, reduced the level or dependence on gas plants, removing premium from the day-ahead product.

2019-05-07 pricingreportgraphs1

Imbalance Prices

Single imbalance prices averaged £41.76/MWh over week 18, with a high of £84/MWh and a low of £8.50/MWh.

The low price for the week was for settlement period 15 (07:00-07:30) on 1st May, when the system had excess generation; the network had been ‘long’ all settlement periods preceding settlement period 15. The final price of £8.50/MWh was set by any accepted bid from Marchwood Power Station to reduce generation output. Other significant contributors during this settlement period were Didcot, Dinorwig and Sutton Bridge.

The high price for the week of £84/MWh was for settlement period 16 (07:30-08:00) on 30th April when the UK system was in imbalance by over 400MWh. During this settlement period national grid paid various embedded generators to increase output. All embedded generators had accepted offers at £84/MWh, and contributed over 45MWh to the system during this settlement period.

2019-05-07 pricingreportgraphs3

Renewables and other

Wind output ranged between 0.4GW (1% of generation mix) to 11.1GW (34.5% of generation mix) during a week where forecasted wind output had a strong impact on day-ahead power prices.

When wind output was dwindling on 1st May, output from gas-fired plant peaked at 20.7GW, averaging 18GW across the day. The UK was also importing 3.4GW from continental Europe. In contrast, when wind was much higher, and demand was lower on 4th May, gas-fired output averaged just 6.8GW and the UK was importing less from the continent.

2019-05-07 pricingreportgraphs4

Seasonal Contracts

Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts suffered losses over the course of the week, with all of the contracts losing over £2/MWh from where they opened on 29th April, to where they closed on 3rd May. The wider fuels complex, which covers Brent crude oil, European carbon and European coal were all bearish over the course of the week, with this weakness feeding through to gas and power prices.

There was a slight reversal to the week’s downward trend during trading on 3rd May when the fuels complex moved up, supporting the UK power curve. The NBP gas curve shifted upwards with Brent crude showing strength. European coal and carbon were also bullish, with coal gaining more than $2/tonne.

The gas market appears to remain bearish, with a number of LNG cargoes, and rising temperatures putting pressure on near-term products which is likely to weigh on curve contracts.

2019-05-07 pricingreportgraphs2

*For more information about Secure and Promote, please consult this Ofgem web page.

Annual Power

The annual power graph shows how the value of an annual power contract changes over time. The annual contract value is the average of the front two seasons, currently Winter 19 and Summer 20.

2019-05-07 annual-prices

To help you make sense of the industry, you can also use our jargon buster and handy guide to Third Party Costs (currently 60% of your bill). And for interesting articles and useful insights, look out for our blog.

Report written by Thomas Stebbings and Ben Symonds, Haven Power’s Portfolio Analysts. To speak to them, or the rest of our Flex & Portfolio Management team’s analysts, call 01473 707755 quoting reference HP250.


Although we’ve made all reasonable effort to verify the information in this report and provide the highest possible accuracy, Haven Power Limited gives no warranty - express or implied - in respect of this information. Furthermore, our provision of this report does not constitute advice of any kind and readers should not take it as the basis for any commercial or financial decisions. You should make any such decision based on your own records, knowledge and perception of power market data, supplemented with appropriate independent expert advice when required.

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