Short-term energy markets swung throughout April on changeable weather conditions. Prices continued to trend downwards at the start of the month before rebounding sharply on the back of unseasonably high demand in the face of an extended cold and windless spell of weather. However, prices were quickly pushed back down in light of warmer and windier conditions, particularly over the Easter weekend. Since then, prices have rallied by as much as £7/MWh on colder forecasts and low wind generation.
Long-term prices were largely supported by rallying oil, carbon and coal markets. Oil prices hit $75/barrel as the US said it would not extend Iran oil sanctions past 1st May, while carbon allowances continued to trend upwards around the €27/tonne mark, amid late compliance buying before the end of April deadline. However, both markets witnessed downward pressure at the end of April, which filtered through to lower UK energy prices.
Great Britain broke another coal-free record over the Easter weekend, operating for nearly 92 consecutive hours. The largest contributors to electricity supplies during the period were gas (42%) followed by wind (12%), solar (11%) and nuclear (2%). This, combined with low demand levels, pushed short term prices back down to 20-month lows.
The first half of May saw a drop in temperatures and reduced renewable output which has helped to support short-term prices, however prices were pressured back down toward the middle of May as temperatures and renewable output increased.