Headlines:
- Gas and Electricity Wholesale prices are higher than last week
- EU Gas Storage levels are 66% full compared to 80% last year
- Lower Storage levels are creating nervousness for this winter and 2025/26
Energy Overview
Gas and Electricity Year Ahead Wholesale costs are higher than last week. They are similar to 2024, showing good value compared to most of 2021 / 2022 / 2023, but are more than double 2020. The Oil price is higher at $81.
Nervousness has returned to energy markets following the recent cold spell and a draw on Gas Storage and an increase in Electricity demand. Centrica, who manage some UK Storage, issued a statement outlining the lower levels, in the region of 26% less than 2024. Although the government said they have confidence in supplies for this winter, Wholesale prices moved higher. EU Gas Storage is also low at 66% full compared to 80% last year. As Gas supplies through Ukraine have ended, there is a concern that reserves will continue to be relied on, and how much Gas will be available for injection in the warmer months for use during winter 2025/26. Russia also claims that Ukraine attacked one of the remaining Gas assets which supplies Europe. LNG imports have increased, and Norway is providing Europe with large volumes of Gas.
Wind generation over the last week has been low at just 19% of Electricity supplies and Gas a high 44%. Coal is no longer available following the closure of our last power station in 2024. During the cold spell, the National Energy System Operator (NESO) issued a notice which signals that spare generation capacity is low, and they may potentially need additional supplies. Although this is part of their planned actions and stressed there was no threat of blackouts, some media outlets chose to focus on this as a headline.
Milder temperatures are now due across Europe which may help to reduce supply concerns. However, the last week has demonstrated how easily Wholesale prices are seeing large increases, due to events and tighter supply margins. We would encourage customers that have Gas or Electricity contracts ending in the first half of 2025, to discuss options with Indigo Swan and closely monitor the position.
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