UK POWER: Cold snap boosts day-ahead power, as weekend prices drop
London (Platts)--11Dec2012/844 am EST/1344 GMT
Prompt power prices continued to climb higher Tuesday morning as
extremely cold weather sets in across the UK and wind generation levels
remain subdued, market sources said.
On the OTC market day-ahead baseload was last heard 65 pence higher on
day at GBP54.65/MWh while peakload power surged over GBP2 higher to
GBP63.05/MWh with support from a "very strong auction result", a trader said.
The N2EX day-ahead baseload power auction outturned at GBP55.34/MWh,
from Monday's GBP53.26/MWh result.
Peak daily power demand is expected to surge over 3% higher than
Tuesday's 55.75 GW to 57.7 GW Wednesday as temperatures plunge below the
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The Met Office issued an "amber" warning Monday ahead of the cold snap
which will be particularly felt in the densely populated southeast of
England. London temperatures will fall between 3 and minus 3 degrees Celsius
Wednesday which is 5 degrees below the seasonal norm, CustomWeather data
In addition to strong than usual seasonal demand the colder weather has
increased power prices across Continental Europe, capping imports into the UK
at zero by midday Tuesday.
Wind generation levels remain negligible at below 200 MW midday and is
forecast to remain below 500 MW over much of Wednesday, adding further
buoyancy to the prompt.
Although EDF Energy returned its 480 MW Hinkley Point B-7 nuclear
reactor to service late Monday night following a 10-week statutory outage
nuclear generation remains below the 8 GW mark following Friday's unplanned
outage at the 660 MW Heysham 2-7.
But as power prices continue higher, an oversupply of gas has weighed
day-ahead gas prices resulting in increasingly favorable spark spreads,
market sources said.
As a result gas-fired generation has increased its share of the energy
mix to 17.6 GW (or 34.7% of the energy mix) while coal-fired power holds it
dominant position at 23.4 GW (or 46.2%).
However, the cold snap is expected to be short-lived with temperatures
forecast to flip to levels above the seasonal norm by the weekend,
CustomWeather data shows.
Weekend baseload prices opened around 60 pence lower than Monday's close
at GBP48.25/MWh and softened further over the morning to GBP47.75/MWh by
midday, traders said.