UK Energy Pricing Trends - 11 June 2021

UK Power Pricing Trends | 11 June 2021

Despite rising temperatures, UK power demand remained below the long-run average for the time of year last week. Nevertheless, spot pricing remained largely flat as the relatively low power demand was offset by a marginal fall in the concentration of renewable power in the energy mix. Forward power prices rose week-on-week in line with natural gas futures, which continued to climb amid further supply concerns. After falling throughout early June, carbon prices reversed a bearish trend to push higher throughout the week, providing further support to UK power prices.

UK Natural Gas Pricing Trends | 11 June 2021

The UK experienced another drop in pipeline flows from Norway last week amid an extension to the maintenance at the Troll gas field. Pipeline maintenance continues to squeeze Europe’s gas supplies at a time when LNG is scarce and there is little available storage capacity to call upon, should it be needed. Despite the bullish supply outlook, the UK gas system has been physically oversupplied on all but two days so far in June, yet the looming supply risks, and the elevated demand in Europe for storage reinjection, meant that there was no drop in spot gas pricing to reflect the healthy intraday supplies – in fact, spot pricing pushed almost 8% higher week-on-week.

UK Energy Complex | 11 June 2021

European coal prices continued their bullish trend last week as nuclear output in Germany was forecast to drop by as much as 1.3GW into Friday. Hot weather and high gas pricing lent further price support, alongside resurgent demand in India. Increasing liquidity in the UK carbon market has coincided with a diminishing premium of UKAs over EUAs, with the two benchmarks trading within €1.07/tonne of each other by Friday, versus an average UK premium of €3.65/tonne since UKAs went live on May 19th. UKAs pushed only marginally higher week-on-week, however, with the EUA-UKA convergence fuelled largely by gains from the European benchmark.

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