Weekly Energy Market Review – 22 September 2016

Weekly Energy Market Review – 22 September 2016

Annual gas prices rose marginally in the last week, while the power market has held around the elevated levels it had reached the previous week.

Annual gas prices rose marginally in the last week, while the power market has held around the elevated levels it had reached the previous week. For both the gas and power markets, short-term supply-demand issues have provided the focus. While these are events occurring now, the UK energy market is looking at them in the context of the possibility of a similar situation during the winter.

Tight power supply margins were expected to continue into the start of this week, with further nuclear outages, maintenance on the UK-France Interconnector, as well as generally higher demand. As in the case of the previous week, there were ultimately no system alerts from National Grid and additional supply came on line in reaction to spot and Day-ahead prices escalating back towards recent highs. National Grid is continuing to forecast similarly tight margins towards the end of the year, which is helping to support annual power prices.

Meanwhile, the gas system has had a variable week with regard to supplies, varying widely between opening under and oversupplied. This was caused by fluctuations in both imports and the use of LNG, as well as demand increasing. The increase was partly due to exports, but also a rise in the use of the fuel in generation. As with power, this has provided some upside for gas, as demand is expected to be higher in the winter. However, the scale of the seasonal demand increase will depend significantly on weather conditions. The first forecasts for the winter have indicated above seasonal normal conditions going into the period, but a drop in temperatures for December.

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Paul Anderson

Posted by on Thursday, the 22. September at 11.33

Paul Anderson joined Utilitywise in 2000 as a member of the Market Intelligence team. As a Senior Analyst, Paul is responsible for the production of bespoke strategic consultancy projects as well as developing analytical models. This has included a market-leading Triad forecasting model and a fully inclusive delivered energy pricing forecast tool. Paul has an Honours degree in Film and English from the University of Kent.