The ICIS Power Index Q1 2016 analysis shows UK gas and power prices have fallen to their lowest in almost a decade
Wholesale UK gas and electricity prices have averaged at least nine-year lows over Q1 2016, according to analysis of the energy markets published by ICIS, the independent authority on energy market pricing.
UK energy prices were more even during Q1, after trending downwards for previous quarters. The ICIS Power Index (IPI) averaged £35.00 per megawatt-hour (MWh) over Q1, the lowest quarterly average since Q1 2007. Gas to be delivered the following year averaged 32.351 pence per therm (p/th) – the lowest quarterly average in more than 10 years.
Gas-fired electricity reached its highest Q1 share of the UK’s generation mix in five years, despite competing with demand for heating during Q1.
‘UK gas demand was affected by a mild winter, but more gas-fired generation helped to keep prices stable,’ says Ben Wetherall, Head of Gas at ICIS. ‘Cheaper gas prices, the additional emissions costs for burning coal, and less wind generation than a year earlier all helped to boost demand.’
Power prices fell less than gas, as traditional power generation is squeezed by more renewable capacity.
‘Some older coal-fired plants closed during Q1 2016, so with less flexible supply available to the market, market participants are reluctant to sell power for winter delivery at lower prices because of the risk of shortages,’ says Zoe Double, Head of Power at ICIS.
The ICIS Power Index delivers independent insight into the complex world of wholesale power prices for both households and industrial electricity consumers, based on real market trading. The total value of the transactions included in the ICIS Power Index for Q1 2016 was £9.3bn.
The ICIS Power Index is updated every working day and is freely available from the ICIS website, along with ICIS’ analysis of price trends and volumes during Q1 2016.
Tara Sabanandan, Marketing Manager, ICIS
Direct: +44 (0) 207 911 1713
Rosie Williams, Aspectus PR
Direct: +44 (0) 20 7092 8127