Energy Sector

Energy Markets: 2021 opened with a familiar theme

09 March 2021

2021 opened with a familiar theme.

Average power prices hit a multi year high in January.

In January 2021, they were €82.46 per mWh up 85% on the same period in 2020 and up 32% on December 2020.

  • Specifically, the outturn in January arose for the following reasons:
  • Gas prices increased by 36% mid month due to high demand arising from cold weather.
  • Strong Asian demand for Liquefied Natural Gas (LNG) diverted gas supply away, resulting in fewer deliveries to Europe. In January, Britain only received 29% of January 2020 deliveries
  • Wind generation contributed only 32% of the generation mix, meaning expensive gas contributed the majority of power requirements
  • Unscheduled Outages remain at some key Combined Cycle Gas Turbine (CCGT) generation plants (e.g. Whitegate 400MW).
  • Demand increased due colder weather.

Key indicators remain elevated

Pricing on the Single Electricity Market (SEM) are ticking up month on month since the Summer.

Period Date Electricity (€/mWh) Gas (p/th) Day Ahead Coal ($/t) Carbon (€/t) Brent Crude ($/bl)
Month End 31-12-20 62.47 57.60 69.25 32.87 51.43
One week ago 24-12-20 65.67 50.16 68.90 32.28 51.10
Four weeks ago 27-11-20 69.90 41.02 60.55 28.39 47.96
Last Year 02-01-20 25.72 31.00 56.85 24.59 66.33
Year on Year % Change 143% 85% -5% 34% -23%

Source: ICE-Intercontinental Exchange

Gas, Coal & Carbon

Day ahead Gas prices increased by 36% on December levels, due to:

  1. Below seasonal norm temperatures increased demand
  2. Reduced LNG supplies into Europe (29% to Britain v January 2020) as better pricing was achieved in Asia

Carbon prices remained strong boosted by speculative buying interest on foot of positive news on COVID-19 vaccine developments, providing a boon to economic  growth.

What’s next?

Power markets will remain bullish in the 1st half of 2021.


  • On going support for gas prices as gas storage levels in Europe are drawn down due to forecasted cold weather. Storage levels now below prior years.

  • Continued outages in Irish and UK power stations together with strong demand will exacerbate price increases.
  • Carbon prices are supported by increased commercial activity as COVID-19 inoculation gains pace across Europe.



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