Market Insight

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Fri, 2nd Feb ’24


  • Looking at the bigger picture, Month-Ahead prices are now within touching distance of those printed at this time of year in 2021, and way below those printed in 2022 & 2023 (see chart).
  • It’s been another day of sideways price action, with contracts all the way down the curve neutral (with just a little downside bias).
  • Prices remain soft off the back of wet and windy forecasts for most of February – though temperatures may fall below seasonal norms toward the end of the month.
  • For the first time in a week, the UK system was long at open (supply outstripping demand).
  • Whilst conditions are overwhelmingly bearish, prices are supported at prospects of a cold spell at the end of the month and ongoing geopolitical risk across the Middle East.
  • Notably (and bizarrely), LNG coming out of Russia finding its way to European ports, has risen m-o-m to its highest level since March-22!
  • European gas stocks remain at historically high levels (70% versus 5-year average of 55%).
  • Monthly Day-Ahead averages are on target this month (so far) to achieve 69p/therm (or circa. 2.35p/kwh).


  • Monthly UK average power load shows demand at the lowest levels for 9 years (see chart).
  • Looking to the continent for signals, we’re seeing flip-flopping weather forecasts indicating warm and (very) windy in the short-term then cold and wet into the latter half of the month.
  • Short-term wind outputs are likley to pressure prices close to zero over the weekend – most likely falling into negative values on Sunday.
  • Down the curve, there’s been little change all week with the bearish momentum having run out of steam for the time being.
  • On the European carbon markets however, the Dec-24 benchmark has been dragged lower by short term windy weather dropping residual load on the power markets across NW Europe.
  • Back in the UK, UKAs have spent all week correcting northwards following Monday’s record low (£31.30/tonne) – at the time of writing, we’re back above £38/tonne.
  • Of course, this reversal in price is most likely caused by the sheer value on offer at these levels – lest we forget, back in Aug ’22, Dec-24 delivery was printing above £100/tonne!
  • Notably, the EUA versus UKA premium has dropped to just over £15/tonne – the lowest since July 2023.
  • Our generation mix today is very bearish – 53% renewables and only 8% gas-for-power burn.
  • Monthly Day-Ahead averages for UK electricity are on target this month (so far) to achieve £56/mwh (or 5.6p/kwh).



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