The June 2021 Gas price rose by 16.6% to 60.24p/therm last week as UK gas storage reaches critically low levels, currently sitting at 7.6% of capacity. With the UK gas system expected to remain short over the next few days there are concerns of gas shortages, which is driving up the price.
The price of UK LNG has seen a significant rise as a result, with 18 shipments now expected over the next 7 days to maintain UK gas supply.
The June 2021 Power price also continued to climb significantly, gaining 11.3% to £69.68/MWh. The main drivers of UK power remain the meteoric rise of EU carbon and continued reductions in EU gas storage. As gas shortages stretch across the EU, power providers have no choice but to use coal as a source of generation. The cost of carbon weighs far more heavily on, the more pollutant, coal-for-power generation. This cost is naturally passing through to the power market.
The Oct 2021 12 Month Gas price increased significantly last week, rising by 10.3% to 56.06p/therm. This is driven primarily by near-term price rises as the UK experiences a combination of very low storage and May weather expected to be far cooler than the seasonal norms.
The Oct 2021 12 Month Power price rose by 7.3% to £65.82/MWh, with continued, record-breaking, rises in the carbon market being the dominant driver. Additionally, the increasing percentage of the UK population being vaccinated and continued rises in UK energy demand will likely lead to increases in the price of power.