S&P Global Platts: UK energy prices tumble on strong supply, weak demand
Natural Gas Prices Fall 20%, Power 15%
LONDON, April 6, 2017 /PRNewswire/ -- UK electricity and natural gas prices tumbled in March as mild conditions and longer days combined with a resumption in French power imports, according to S&P Global Platts data.
While prices were down on February they remain strongly up year on year. This is the longer term price trajectory referenced by retail suppliers, several of whom have raised household gas and power bills in 2017.
With the near-term decline in wholesale gas price outpacing that of electricity, UK gas-fired power production in March increased on February levels, to 10.63 TWh from 9.22 TWh.
Generation from renewable energy and nuclear sources, meanwhile, jumped 14% on month to 13.63 TWh in March.
Wind speeds were healthy, with production up 1 TWh year on year to 2.74 TWh, while imports were back to normal (2.13 TWh) with the return of the 2-GW IFA link to France.
Hydro and solar generation also picked up on a year on year comparison, while coal-fired generation of 1.46 TWh in March was down from 3.46 TWh in February and 4.12 TWh in March 2016. Electricity demand slipped 4% on year to 24.86 TWh.
"The peak-flattening effect caused by the UK's growing solar park kicked in early this year, reducing the Day Ahead base-peak price spread to under £2/MWh mid-March," said Anuradha Ramanathan, Pricing Team Lead, European Electricity, S&P Global Platts.
In the gas market, March supply was boosted by a rise in regasification of liquefied natural gas from the South Hook terminal in line with a heavier Qatari delivery schedule into the facility.
Beach supplies -- Norway and the UK combined -- remained firm during the final month of the Winter 2016-17 delivery period, allowing for a reduced reliance on imports from Continental Europe and storage withdrawals to balance the system, leading to the steep monthly price fall.
Gas-for-power demand posted its first annual fall on a monthly basis in March since November 2014, despite the month on month increase in gas-fired generation.
Winter 2016-17 gas-for-power demand came in at 11.74 Bcm, up 34.4% on an annual basis and the highest in at least the past six winter seasons.
| Platts UK Day-Ahead Power and Gas Assessments |
|||||||||
| Mar-17 |
Feb-17 |
MoM change |
Mar-16 |
YoY change |
|||||
| UK power (£/MWh) |
|||||||||
| Day-ahead average |
42.02 |
49.35 |
-15% |
33.89 |
+24 |
||||
| UK gas (pence/therm) |
|||||||||
| Day-ahead average |
41.09 |
51.39 |
-20% |
29.56 |
+39 |
||||
| Source: S&P Global Platts |
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For more information on electric power or the methodology used by Platts in its power assessments, visit the S&P Global Platts website www.platts.com.
About S&P Global Platts
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