24 October 2024

PPA and GPA Pricing Update October 21st 2024

PPA and Green Gas markets edge higher on geopolitics and movements in the broader commodity complex.

Underlying gas markets had moved lower on Friday despite some continued supply issues. Unplanned maintenance at the Oseberg field in the Norwegian sector reduced the UK gas “linepack” by around 10MCM.
Carbon pricing was also lower on Friday but off recent lows. EUA pricing is now around €62.50.
This morning, the underlying NBP and TTF markets were up by around 2%. Markets remain watchful for a possible escalation in Israel-Iran tensions after a Hezbollah drone exploded close to Netanyahu’s home on Saturday.
We also note that the ECB has lowered rates to 3.25% as inflation continues to slow. NSR expect UK inflation to continue to fall in line with the BoE target of 2%. This will reduce FiT tariff assumptions relative to this. FiT levels will be set at the prevailing RPI price at the end if December.

Conflict in the Middle East and unplanned Norwegian gas maintenance again support Green Gas and PPA markets today.
However, the medium-term price direction picture still needs to be clarified, with European demand set to fall for a third consecutive year and further significant wind capacity deployment through 2027.
The market also reflects or grapples with mixed price signals. This is most obviously seen in the risk premium on the Nov 2024 relative to 2025 winter periods:
NBP Nov 2024 @ 104p per therm.
Q4 2025 @ 102p per therm.
Premiums on “call options” this winter also trade at a premium to 2025.
Gas markets again support UK Power and PPAs.
Front-month baseload power for delivery in Nov trades at £90.5 MWh.
Summer 2025 trades at £76.50 MWh.

Please let Fran or me know if you want to see any PPA or Green Gas pricing.

Thank you