UK Day-Ahead Power Prices Edge up Despite Bearish Fundamentals

Day-ahead power prices in the UK market posted small gains on Wednesday, despite easing spot gas contracts and forecasts for increased wind power generation, supported by a slight uptick in power demand.

Baseload power for Thursday delivery was last heard trading at GBP37.40/MWh, up 50 pence on the day, while the peakload day-ahead contract moved up 20 pence to change hands at GBP42.20/MWh before the Platts 1100 GMT close.

According to the N2EX and APX exchanges, the day-ahead base and peak auction outturned below the OTC prices at GBP36.89/MWh and GBP41.23/MWh respectively on Wednesday.

The UK's National Grid expects peak power demand to increase to 48.9 GW on Thursday, up from Wednesday's forecast demand of 47.9 GW, while wind power output is likely to hit a maximum of 7.2 GW on Thursday, rising from Wednesday's wind expectations of 6.9 GW.

Surplus margins are likely to improve slightly to 11.7 GW on Thursday, compared with 11 GW expected on Wednesday, the grid data showed.

Meanwhile on the NBP gas hub, the same-day gas contract traded at 36.65 pence/therm and day-ahead contract rose to 36.60 p/th, down from Tuesday's close of 36.875 p/th.

On the supply side, gas-fired power generation stood at 12.1 GW at midday Wednesday, while the wind power output fell shy of 5 GW. Coal-fired power plants generated 9.7 GW of electricity at midday, while nuclear plants produced 8.3 GW, the grid said.

French imports into the UK dropped to zero early Wednesday morning amid a strike by EDF workers, which is expected to end later in the day. However, electricity from the Netherlands remained fairly stable at 992 MW, the grid said.

(platts.com)