GPA & PPA Update – Gas and Power Markets continue to decline.
- Despite the risk of LNG supply from Hurricane Beryl in the US this week, gas and power markets continue to decline.
- Weak demand and high renewable output also lead to lower contracts, mainly at the front end.
- NBP front-month gas at 73p per therm.
- NBP Winter24 gas is at 94p per therm.
- April 25 annual baseload power at £79/MWh.
Update 12th July
- Green Gas and PPA pricing remain weak as we move through “summer” in the UK!
- NBP gas for August delivery last trades this morning were at 71.7p per therm. To put this level into context, this pricing range was last seen through April’s weakness.
- We are watching for a break below the 70p level that could bring further downside price action.
- PPA levels are lower relative to underlying power and gas markets.
- We still like forward fixing, particularly for those clients with multiple sites or those looking for budget certainty.
- Regarding the broader commodity market (increasingly important in setting LNG pricing for Europe as the “marginal therm”), US gas remains weak with similar market dynamics regarding storage to the UK / Europe.
- European gas storage is over 80% full now. Norwegian pipeline flows remain strong.
- Cool weather in North West Europe means less air conditioning demand despite heat waves in Southern Europe.
We hope to see some price volatility return that will present a forward-fixing opportunity for generators looking at 2025 and 2026 pricing.
If you have any questions, please call the desk or email Fran or me.
Thanks
Jamie
