The makeup of the UK power stack changed markedly on Wednesday, as the UK saw upwards of 13.6GW of wind generation, the highest levels for some time. This led to CCGT generation dropping to 25.5% or 8GW of the UK stack, with coal displaced. However for the rest of the week the UK was much more reliant on CCGT, typically in excess of 50% of the stack, with coal units coming back online ahead of the weekend as wind output slumped to 2GW. The high winds on Wednesday led to the N2EX out turning, for delivery today at £57.27/MWh, down from the £69/MWh on Tuesday for example. Strong prompt prices have however persisted for the rest of the week with prices clearing as high as £107.96, between 18:00 and 19:00PM for delivery Friday.
Winter 21 BL has followed its gas counterpart higher, as the worrying gas storage picture and strong carbon prices fuel stronger sentiment. Prices started the week at £76.85/MWh, trading as high at £78.70/MWh on Thursday. Poor liquidity and a lack of selling appetite continues to exasperate the situation.
Prompt and near curve NBP prices continue to remain very strong, within day prices printing as high as 70p/th on Tuesday this week. Unseasonably cool temperatures, coinciding with periods of low renewable generation have continued to drive the risk to the upside. Subsequently, for the most part this week the line pack has been reported to be significantly under supplied, at times by more than 20mcm. Falling flows into St Fergus and dwindling LNG send out from Isle of Grain all causing further restrictions on the supply side.
On the far curve, Winter 21 has traded as high as 69.35p/th. The colder temperatures and high prompt prices have meant that storage sites have still been withdrawing over the last week, despite the fact UK gas storage is currently only 8% full, compared with 57% this time last year. Europe is likely to continue to see a tight gas picture over the coming weeks for May, as we are fast approaching Norwegian maintenance season and the continent’s storage sites look set to start ramping up injections ahead of next winter, lifting the W21 contract. Prices have edged back from these highs however many are now anticipating 70p/th gas for W21.