Gas prices up as wind drops and demand goes up
A drop in wind-output and increased demand combined to increase gas prices on Wednesday.
Having seen prices ease steadily throughout the previous two sessions all curve contracts rebounded with the January-24 contract gaining more than 0.1p/kWh when compared to its previous settlement, potentially as a result of a drop in renewable energy.
According to data from National Gas, wind generated power slumped by circa 30% day-on-day, subsequently bolstering CCGT (combined-cycle gas turbine) offtake.
Further support perhaps came from unseasonably high demand, data shows that actual demand outpaced seasonal norms by circa 60 mcm on average throughout the session.
The rise in demand contributed to a short British system which was more than 7mcm undersupplied at 15:00 London time on Wednesday.
Natural gas prices have continued their upwards momentum this morning with the Summer-24 front-season contract last offered circa 0.07p/kWh above its previous closing price at time of writing.
If we check the latest half hourly period at the time of writing (09:30 – 10.00), electricity demand in the UK is 48.26 GW’s.
36.20% (17.47 GW’s) is being generated from gas at the moment with wind turbines contributing 43.70 GW’s (21.09%). Nuclear is contributing at 9.81% (3.06 GW’s) and solar adding 0.14 GW’s (0.28%).
The 4 main sources of electricity account for over 86% of the UK’s generation.
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