As we turned into second half of 2021, power pricing remained unseasonably high.
Average power prices dipped slightly from May, decreasing 4%. In June 2021, they averaged €97.80 per mWh, up 3.5 times the same period in 2020. Prices are unseasonably high versus similar periods since ISEM commenced in Oct 2018.
Specifically, the outturn in June arose for the following reasons:
- Wind generation contributed only 24% of the generation mix, down 16% on May, but still low historically.
- Unscheduled Outages remain at some key Combined Cycle Gas Turbine (CCGT) generation plants such as Whitegate 440MW and Huntstown 400MW. Overall average outages for June were stubbornly high just under over 2.5GW, down 4% on the May average.
- Day ahead Gas prices averaged 72p/th up 9% on May averages. They almost touched 90p/th at month end.
Gas, Coal & Carbon
Day ahead Gas prices were up 9% on May due to following factors;
- Maintenance in UK and Norway fields meant gas production reached a 20 year low
- LNG deliveries to Europe were very low in June due to strong demand and better prices available in Asia.
- Summer storage injection is further behind schedule, therefore increasing demand for gas in Q3, causing further lifts in gas prices.
- Gas stores are 41% full v 79% twelve months ago
Carbon prices traded sideways in the €50-€55/tonne in June. Coal prices increased $17/tonne as increasing gas prices has sometime brought coal based generation higher in the merit order for power.
12 months forward prices almost doubled since late 2020. Why has it come to this?
- On going support for gas prices as gas storage levels in Europe are at multi year lows.
- Significantly, continued outages in key Irish power stations are expected to continue throughout 2021.
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