Mixed price moves on the wholesale market amid reduced wind output

Mixed moves were observed at the NBP on Tuesday, with the near-curve building on the previous session’s gains, while contracts further out posted only modest gains and losses.

Expectations of lower temperatures and reduced wind output likely offered support with UK Met Office expects temperatures to return toward seasonal averages.

This is in line with Crown Gas and Powers 14-day demand model, which projects a gradual recovery in demand over the coming week before edging slightly above seasonal norms by Monday 17th.

NESO forecasts now suggest a decline in wind generation over the next few days, breaking from the persistently high levels of the past two weeks and paving the way for higher CCGT demand.

Baseload power prices also saw bullish price action, with upward momentum filtering further along the curve and lifting all contracts.

Sustained strength on the Carbon EUA benchmark continued to provide underlying support, reaching €82.31/tonne by Tuesdays close and accumulating net gains of 5.8% since 27th October.

Elevated carbon prices raise the cost of fossil fuel-based generation, reinforcing the broader upward pressure on power markets.

This dynamic was further compounded by short-term forecasts pointing to a decline in renewable output, which may have reinforced upside by increasing reliance on more carbon-intensive generation sources.

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Price commentary courtesy of Crown Gas and Power