UK Power Pricing Trends | 1 April 2021
The U.K. energy mix changed markedly throughout last week, with wind turbine output falling by more than 55% Friday-to-Friday. Gas turbines picked up most of the slack when renewable generation was low, and with renewable output dropping into the end of the week as discussed, spot prices rallied substantially. Curve contracts pushed higher amid a bullish energy complex, underpinned by gains in oil and carbon, with additional support lent via strength in equity benchmarks.
UK Natural Gas Pricing Trends | 1 April 2021
Despite mild temperatures, a sharp drop in winds across the U.K. saw CCGT generation sites ramp up output throughout the week, lifting spot gas prices by 10% week-on-week. The expectation of a cold start to April boosted short-run forward contracts while gains in carbon and coal ensured longer-dated curve contracts also moved higher week-on-week. Offsetting the bullish demand-side narrative was the ongoing strength in the European LNG schedule. In March, northwest Europe welcomed the most LNG throughout a single month since December 2019.
UK Energy Complex | 1 April 2021
European coal benchmarks moved higher last week, despite strength in carbon EUAs and an easing of supply disruption in Australia following flood damage. Gains were driven by strength in Chinese demand and a colder weather outlook in Europe for early April. Carbon EUAs pared its losses sustained throughout week 13, which were precipitated by surging COVID-19 cases across Europe, with support lent from the imminent April compliance deadline and gains in benchmark equity indexes, stemming, chiefly, from news of U.S. President Joe Biden’s multi-trillion dollar infrastructure spending plan.
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