Electricity and Gas prices both declined during Week 34

Electricity and Gas prices both declined during Week 34. In Power, Winter 24 prices fell 5% to £92/MWh. Summer 25 ended the week at £81/MWh a 5% decrease. September prices fluctuated slightly throughout the week finally ending the week at £78/MWh a 6% fall. Meanwhile in gas, Winter 24 prices fell 7% to 105p/therm, Summer 25 prices fell 6% to 99p/therm. September gas prices similarly to the power prices fluctuated throughout the week finally ending the week at 91p/therm a 6% fall.

The price falls reflected a week of strong fundamentals. Wind was responsible for 45% of the nations power with Nuclear beating out gas for 2^nd place at 19%. Temperatures slowly dropped through the week which led to a continuation in the recent trend of gas demand/use being heavily below seasonal averages. The UK put this surplus availability of gas to good use by continuing to inject into storage which ended the week 4.5TWh better off than last years position. Strong output from renewables was welcome during the week as imported power from the French nuclear fleet was reduced.

The markets continued to pay close attention to developments in the Kursk region as Ukrainian troops continued to hold the Sudzha gas facility which is significant as it is Russia’s only direct pipeline into Europe. As gas was flowing relatively unfettered during the week the prices cautiously declined. Although the contracts for the gas are due to expire by the end of 2024 should the gas become unavailable in the present day has clearly not been factored into pricing. This is somewhat curious as the European gas fundamentals are very strong with storage levels >90%.