Northern Irish wholesale gas and electricity prices have decreased by 49 per cent and 26 per cent respectively compared to the same period last year, according to the latest Naturgy Energy Review and Forecast.
The report shows that wholesale gas prices fell by 11 per cent on a month-by-month basis while electricity prices registered a decrease of 8 per cent.
Planned maintenance on a number of Norwegian pipelines responsible for delivering gas into key energy hubs; such as Germany and the Netherlands, meant deliveries into the UK were far higher than normal.
The International Energy Agency (IEA), which released its 2020 outlook during June, pointed to a decidedly bearish outlook for Brent oil. Moves on the wider energy complex, including oil, coal and carbon will continue to dictate moves on the far curve.
Commenting on the review, Naturgy Energy Analyst, Lauren Stewart, said:
“With the summer weather finally arriving towards the end of June and with higher than normal temperatures expected to continue into July, sentiment in the market is expected to turn more bearish than neutral.
“As always, wind generation has a big impact on electricity prices which increased by 12 per cent compared to last month. Renewables made up 26 per cent of the overall fuel mix for the month. However, there was some volatility in the market with several outages across the country including in Ballylumford and Moneypoint”, added Ms. Stewart.
Gas Market Overview
Prompt prices during the first part of June were far more stable than the previous month, trading within a relatively tight range. LNG imports into Britain surprisingly dropped off during the first half of June, however this had little impact on near-curve products. With spot LNG prices remaining low, speculation is mounting as to whether US producers might cut back output later this year in order to re-balance the market, which could provide some price support for near-term products.
Electricity and Wind Energy Update
June registered a 8 per cent decrease in electricity prices month on month, averaging at 3.89 p/kWh. Although wholesale electricity prices were low overall, there was some volatility in June due to intermittent wind generation on the system. As a result, the system called upon more expensive forms of power generation like coal, gas and peat to meet demand on the system. However, any volatility in the month was alleviated by low demand, losses on NBP prompt prices and the return of the Moyle interconnector.
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