The July 2021 Gas price rose 6.3% to 71.83p/therm last week amid temperature forecasts below the seasonal norm, outages in Norway and low LNG send-out. Summer LNG demand remains strong in Asia (led by China and South Korea) and Latin America, meaning there is less supply available to Europe.
The Oct 2021 12 Month Gas price rose 3.9% to 64.64p/therm as Europe faces an uphill battle to refill gas storages before next winter.
European storage levels are currently 44% of full capacity, still well below the 5 year normal in June, raising concerns that storage will not be completely filled when winter begins.
Ongoing summer gas maintenance at several North Sea terminals isn’t helping, as UK and Norwegian supplies are below capacity.
The Oct 2021 12 Month Power price saw an increase of 1.3% to £71.95/MWh, tracking gas prices higher.
In related news, the North Sea Link (NSL) power interconnector between Norway and the UK will begin testing this month and is expected to be online by September 2021. The new interconnector will be the longest in the world at 765 km.
Once fully commissioned it will have a capacity of 1.45GW, providing the UK with low carbon hydro energy. The new interconnector will bring the total UK capacity to 7.4GW, with a further 5 power interconnectors expected to go live in the next 4 years.