Increasing solar to offset lost wind generation
05 May 2020
Demand on the UK gas system rose to 225MCMDemand on the UK gas system rose to 225MCM as exports to the continent ramped up to 50MCM on Friday and deliveries into the system were forecast 10MCM short early on and remained so to close of business. Prompt gas prices rose on the supply shortfall with the spot and day ahead contracts gaining 0.90p while the week ahead contract for this week was up by 0.70p. A week of mixed movement on the UK gas futures market ended with losses across the board on Friday, leaving prices lower week-on-week for a sixth consecutive week. The new front month contract for June was the only significant mover, shedding 0.59p to settle at 13.28p.
GB baseload power futures tracked gas prices lower on FridayGB baseload power futures tracked gas prices lower on Friday with the carbon market closed for the Mayday holiday in mainland Europe. The new front month contract for June recorded the biggest loss of £0.7/MWh on the day while futures contracts were down by between £0.6 and £1.3/MWh week-on-week. The day ahead contract gained slightly while the week ahead for this week eased fractionally with lower wind power forecast for this week. Increasing solar generation is expected to offset some of the lost wind generation to maintain a strong renewable contribution overall.
The oil market recovery continued in early trading on Friday with Brent crude gaining almost a dollar overnight to trade at $26.21 mid-morning as fresh production cuts by OPEC and Russia kicked in. The early gains were retraced however with Brent crude finishing the day just 4 cents lower but still $1.63 higher week-on-week. US benchmark oil prices finished 5% higher day-on-day at $19.78 a barrel, marking the highest closing level in more than two weeks on growing confidence that as global economies begin to reopen for business, demand for oil will start to increase. West Texas Intermediate finished about 17% higher for the week, marking the first weekly gain in four weeks.
West Texas Intermediate finished about 17% higher for the week