London (Platts)--19Nov2012/821 am EST/1321 GMT

Prompt power prices opened higher Monday morning but fell back into negative territory by midday after a bearish outturn on the day-ahead baseload power auction ahead of potentially record breaking wind power generation and weaker NBP gas prices, market sources said.

On the OTC market, day-ahead baseload traded at GBP48.10/MWh before the N2EX baseload auction but was last heard midday at GBP47/MWh, down 85 pence from where Monday baseload closed on Friday following a lower N2EX auction result at GBP47.25/MWh.

But day-ahead peakload contracts had little trade post-auction and therefore maintained their higher OTC levels at GBP56.50/MWh midday, up from Friday's GBP55.60/MWh close.

"The auction is wholly dependent on where people are willing to buy and sell and the algorithms that run behind it. We do sometimes see disparity between auction and OTC in both directions," a trader said.

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The trader added that although the auction is primarily used to fine tune availability of baseload power it was "probably" influenced by the record wind generation levels expected Tuesday, as well as lower NBP gas prices.

Wind output midday Monday was pegged at significantly stronger levels than seen at the end of last week at just over 4 GW, or 8.9% of the energy mix at midday.

However, initial forecasts suggest even stronger wind generation levels of around 4.4 GW over Tuesday's peak demand hours, reducing the need for more expensive gas-fired generation.

Higher wind generation will also offset lower nuclear contributions following the start of planned refueling work at EDF Energy's 620 MW Hartlepool-1 nuclear unit on Saturday.

Gas-fired power has fallen from levels midday Friday at around 14 GW to just 12.4 GW midday Monday, or 27.5% of the generation mix while coal-fired power holds steady at around 20 GW, or 44%.

Day-ahead gas last traded before midday at 65.25 p/th on the NBP gas hub, down by 0.50 p/th due to a well-supplied gas system supported by strong Norwegian imports and LNG output.

Elsewhere on the prompt, contracts remained relatively flat Monday morning with weekend baseload trading just 10 pence higher than Friday's close at GBP49.10/MWh and December baseload virtually unmoved at GBP50.05/MWh midday.

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