UK day-ahead power contracts fell steeply Friday, mirroring declines in the spot gas market, with an improved supply picture and bearish power demand further weighing on the prompt, sources said.
Both the baseload and peakload day-ahead power contracts dropped to nearly two-month lows of GBP46.50/MWh and GBP51/MWh, respectively, shedding GBP3 and GBP3.75 from the previous close.
The spot contracts were the lowest since December 23 when the base was assessed at GBP44/MWh and the peak was pegged at GBP48.50/MWh, according to S&P Global Platts pricing data.
According to National Grid estimates, wind power supplies are expected to peak at above 5 GW on Saturday, higher than Friday's forecast of 3 GW, and rise further early next week.
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The UK's Met Office predicts a mild week-8 adding that "it will be breezy for many, with the strongest winds likely across the north and west, where there may be gales at times."
Further on the supply side, Grid revised higher the available UK-French IFA interconnector capacity to 1.5 GW from 500 MW estimates earlier this week. The 2 GW power link has been running at reduced capacity since mid-November when four of its eight cables were damaged during a storm.
Meanwhile, peak power demand
is set to drop to below 46 GW next week, down from 46-47 GW levels seen this week, with Friday's demand expected to hit a maximum of 45.3 GW, Grid data showed.
At midday Friday, gas-fired power production climbed up to 20 GW after wind output slipped to around 1.2 GW from nearly 6 GW on Thursday, Grid data showed.
Electricity generated from coal and nuclear power plants reached 5.1 GW and 8.4 GW respectively, while Dutch and French imports were 814 MW and 1.4 GW respectively at midday, Grid said.
On the NBP hub, prompt gas contracts gave up the previous day's gains as supply pressures eased with the same-day and day-ahead prices heard at 47.10 pence/therm and 47.50 p/th, respectively, Friday morning.