Weekly UK Insight - 25 November 2019


p/therm 15 Nov 19 22 Nov 19 Change
Day-Ahead (DA) 39.15 42.00 7.3%
Dec 2019 41.03 42.20 2.9%
Summer 2020 38.85 39.69 2.2%
Winter 2020/21 48.99 49.50 1.1%

Source: Reuters

The UK’s Day-Ahead gas price climbed 7.3% to 42.00 p/therm, following unplanned outages at Norway’s Troll and Aasta Hansteen gas fields, meaning the UK gas system ended last week around 38 mcm/d undersupplied.

The outages were initially expected to end last Friday but are still ongoing and could last another 3-4 days until full production is restored.

Dec 2019 gas prices also rose 2.9% reflecting a drop in temperatures. However, price gains were limited as LNG imports into Britain are still reasonably strong, supporting gas supply. Six deliveries are currently expected over the next two weeks, originating from the USA, Trinidad and Tobago, Peru and Singapore. It is incredibly unusual for UK terminals to be receiving this many LNG tankers without Qatar supplying any of them.

The Summer 2020 gas price gained 2.2% week-on-week to 39.69p/therm, after a highly unusual earthquake in the south of France resulted in French electricity giant EDF cutting its forecast for nuclear energy production this year.

Despite Europe’s gas storage level remaining unusually high at around 94%, the Continent has experienced significant gas supply uncertainty in recent years as a result of nuclear outages.

A weaker Pound and higher carbon prices also made gas prices across the curve more expensive.


Weekly UK Insight 25 November 2019
Source: Reuters


£/MWh 15 Nov 19 22 Nov 19 Change
Day-Ahead (DA) 46.93 45.01 -4.1%
Dec 2019 47.02 47.79 1.6%
Summer 2020 44.61 45.51 2.0%
Winter 2020/21 51.97 52.71 1.4%

Source: Reuters

Day-Ahead power prices slid 4.1% to £45.01/MWh, reflecting an increase in wind output, which overshadowed the equivalent increase in gas spot prices.

However, Dec 2019 power prices edged 1.6% to £47.79/MWh tracking monthly gas and carbon.

Summer 2020 power prices also rose 2.0% to £45.51/MWh in response to gains in the equivalent gas and carbon markets, with the weaker Pound Sterling also bullish.

France’s unusual 5.4 magnitude earthquake also resulted in EDF taking three reactors at the Cruas nuclear plant offline. The reactors have been taken offline for checks, although no damage has been found so far.


Weekly UK Insight 25 November 2019
Source: Reuters


$/bbl 15 Nov 19 22 Nov 19 Change
Brent Crude Jan 20 63.30 63.39 0.1%

Source: Reuters

Brent crude oil prices edged 0.1% higher last week to $63.39/bbl on news that China’s crude oil imports from Saudi Arabia rose 76.3% in October, boosted by demand from new refiners.

Also supporting price gains, Russia said it would continue its cooperation with OPEC to keep the global demand balanced. OPEC members are next scheduled to meet on 5th December in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

Escalating Iran-related tensions also boosted prices, after a U.S. aircraft carrier sailed through the vital Strait of Hormuz.


Weekly UK Insight 25 November 2019
Source: Reuters

Exchange Rates & Economics

£/$ 15 Nov 19 22 Nov 19 Change
GBP/USD 1.2899 1.2830 -0.5%

Source: Reuters

The Pound Sterling fell versus the U.S. dollar and euro after Jeremy Corbyn unveiled his party’s election manifesto. Radical plans to transform Britain with 5% public sector pay increases, higher corporation taxes and a sweeping nationalisation of infrastructure, fuelled fears among Pound investors that the economy would take a hit.

Investors digested economic data for both the service sector and the manufacturing sector. Data showed that UK businesses experienced the deepest downturn in three and a half years this month.

Continued weakness in the economy could see the Bank of England adopting a more dovish stance and ease monetary policy.


Weekly UK Insight 25 November 2019
Source: Reuters

Regulatory and Market News

London producing theatres reduce carbon footprint by 43% in five years

Leading producing theatres in London have reduced their average carbon footprint by 43% in the last five years, a report has revealed.

The London Theatre Consortium report outlines the results of a decade-long programme to reduce carbon emissions.

The consortium is a collaboration between 14 producing theatres in the capital, including the Almeida, Lyric Hammersmith, Royal Court, Young Vic, Bush, Unicorn, Yard theatres, and green arts charity Julie’s Bicycle.

Other venues include Battersea Arts Centre, the Kiln, Theatre Royal Stratford East, Donmar Warehouse, the Gate, Hampstead Theatre and Soho Theatre.

Key findings from the Creative Green strategic report for 2018/19 include:

  • Theatres in the consortium reduced their carbon footprint by 11% in the last year;
  • Overall energy use has decreased by a third since 2010;
  • Eight LTC theatres procure 100% renewable electricity;
  • More than half of LTC theatres have programmed or curated work with environmental themes this year.

The report adds that the LTC is developing a new set of aims to work towards for 2025, which includes exploring the potential to achieve net-zero carbon emissions across the group. This follows news that the Royal Court has committed to achieving net-zero carbon emissions over the course of the next year.

Sian Alexander, executive director of the Lyric Hammersmith Theatre and LTC vice chair, said: “As awareness of the climate emergency grows it has never been more important for us as cultural leaders to work together to tackle climate warming.

“We are thrilled at the significant progress that we have made to reduce our environmental impacts through our partnership work over the past decade and the learning we have been able to share.”

Director of Julie’s Bicycle, Alison Tickell, said: “Combining creative flair with operational rigour, the 14 theatres that make up the London Theatre Consortium are demonstrating how to respond to the climate emergency.

“Over many years, the consistent leadership, collaboration and integrity of the London Theatre Consortium to meet the climate challenge head-on has hugely enriched the arts and cultural sector.”

LINK: The Stage – theatres reduce carbon footprint

Vattenfall and Microsoft pilot hourly renewable power matching solution in ‘world’s first’

Vattenfall and Microsoft are piloting what is claimed to be the world’s first hourly matching scheme in Sweden that aims to provide customers a new level of transparency into their electricity consumption.

Guarantees of Origin (GOs), an electronic document which provides proof of the source of a given quantity of renewable energy, are currently being used today.

The new 24/7 solution connects power generation such as wind and hydropower from Vattenfall with data from smart meters that measure real time consumption.

Previously production was matched with consumption over a year, however, the new solution matches this hour by hour.

Vattenfall and Microsoft believe that with an increasing number of businesses committing to 100% renewable energy, fulfilling this ambition requires a reliable way of tracking clean power.

This solution is, therefore, expected to enable energy providers to more easily understand demand for renewable energy hour-by-hour and take action accordingly as well as help drive “true market demand” for clean power.

Daniel Akenine, National Technology Officer at Microsoft Sweden said: “With this new level of transparency, you can see if your commitment to 100% renewable energy covers each hour of consumption.”

LINK: Vattenfall – renewable PPA with Microsoft


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