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UK POWER: Low demand, weak NBP gas weigh on UK prompt prices

London (Platts)--23 Jun 2014 902 am EDT/1302 GMT


UK baseload and peakload prompt power prices slumped Monday to a fresh four-year low as NBP spot gas prices fell further on comfortable supply, a market source said.

On the OTC market, day-ahead baseload dropped to the lowest value since April 2010 at GBP35.20/MWh, while the peakload next day power price fell to GBP38.85/MWh before the Platts 11:00 BST close on Monday, both shedding more than one pound from Friday's assessment.

UK spot power prices on the base and peak reached a new four year low on Monday, the weakest since April 6, 2010 when the contracts were assessed at GBP34.50/MWh and GBP38.50/MWh respectively, according to Platts data.

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The UK's day-ahead baseload power auction outturned at GBP34.53/MWh through the N2EX and APX exchanges, below the OTC traded value on Monday.

Weakening gas prices on the spot market coupled with steady power demand kept the downward pressure on the power market.

Maximum forecast demand is expected to remain fairly steady on the day at 38.2 GW on Tuesday, in line with 38.3 GW forecast for Monday, the latest National Grid data showed.

At 11:00 am BST Monday, the UK NBP within day gas contract was down by 0.75 p/th at 37.75 p/th, while the day-ahead headed lower to 38.25 p/th, down 0.35 p/th from the previous close.

The market has seen an uptick in gas-fired power generation due to low gas prices.

Power generation from CCGTs jumped to 17.1 GW, accounting for 46% of the total energy mix, and taking the largest market share in the UK, according to National Grid data.

Also at midday, coal and nuclear power output stood at 7.7 GW and 7.8 GW, or 20.8% and 21% respectively.

Wind power generation at midday was below 500 MW with the wind forecast outturn much below earlier expectations, the Grid data showed.

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