NSR Market Update: Green Gas down 2.8% and PPA and underlying baseload power down 2.5%
- PPA and Green Gas markets stabilised this morning (8/10/24) and traded flat to yesterday’s closes in early market activity.
- The UK NESO (National Energy System Operator) has published its annual “Winter Outlook”. Summary key points from our perspective:
- The winter generation margin is at its highest since 2019, marking a significant improvement.
- The buffer of “spare capacity” has now widened to 8.8%.
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Interconnector flows of imported European power are a crucial driver of this surplus, and are expected to increase even further in the coming months.
- Imports are up 8% year on year.
- Viking Link (1.4GW), commissioned in April, will ramp up capacity, delivering a 30% year-on-year increase.
- The NESO also comments on “permanent demand destruction”, which the NSR had discussed previously.
NSR Market Update: PPA pricing down 3.25% & Green Gas down 4%
- NBP gas contracts moved to a premium over European TTF benchmarks.
- We usually expect the NBP to trade at a discount through much of October.
- The move to a positive spread suggests increased relative UK demand over Europe.
- Unlike European-traded gas markers, the UK lacks “seasonal swing storage” (after the closure of the Rough facility in 2017).
- On the PPA side, weak carbon and wind performance continued to depress underlying power markets.
- German Wind will reach nearly 43GW in the coming days.
10/10/24 NSR Market Update: NBP gas is up 2.5% & PPA pricing is up 1.5%
