UK Power Pricing Trends | 23 April 2021
A respective 60% and 70% week-on-week lift in U.K. average temperatures and wind generation saw an erosion in spot prices throughout last week. However, the downside was limited as temperatures remained around 2 degrees below the seasonal-norm and wind generation only contributed, on average, 7.5% to Britain’s energy mix. Meanwhile, another week of gains in the European carbon market fed into the U.K. power curve and supported seasonal contracts.
UK Natural Gas Pricing Trends | 23 April 2021
Britain’s robust LNG supply outlook was unable to encourage seasonal gas contracts lower last week as short-run fundamentals continued to suppress gas storage reinjection and carbon recorded another week of substantial gains. Furthermore, maintenance outages saw average gas flows to the U.K. from Norway drop 25% week-on-week. Spot prices moved lower on the week, however, as an improvement in weather conditions helped to trim U.K. gas demand by 10%.
UK Energy Complex | 23 April 2021
A bullish energy market narrative was supported last week by promising, real-time economic data, such as restaurant bookings, job postings and road traffic use. The data indicated that the U.K. economic recovery is beginning to gather momentum. In spite of this, the U.K. labour market unexpectedly weakened with payroll numbers declining for the first time in four months. In Europe, the EU Commission made its carbon plans legally binding, which provided significant support to European carbon prices. Additional support was provided by demand from compliance emitters, ahead of the April 30th deadline. In the U.K., the government unveiled plans to now target a 78% emission reduction target on 1990 levels by 2035, carrying potential implications of the U.K. ETS ahead of its inaugural auction on May 19th.
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