Monthly Wholesale Price Brief - A Review of European Gas and Power Price Trends: January 2007

Table of Contents

• CATALYST
• SUMMARY
• METHODOLOGY
• ANALYSIS
  • This brief assesses key developments in Europe' s key wholesale energy markets
  • Spot and curve gas prices wilt in the face of mild winter temperatures
    • Bearish fundamentals continue to dominate the UK spot gas market
    • Supply insecurity premium is eroded further on the UK gas curve
    • Illiquid Belgian spot market tracks bearish UK trading sentiment
    • Oil market rebound fails to stimulate the Belgian gas curve
    • Dutch gas exports to the UK continue, despite a spot price premium
    • Dutch gas curve becomes the most expensive in NW Europe
  • NW Europe' s illiquid wholesale electricity markets track gas lower
    • Bearish gas prices continue to drive UK spot power market losses
    • Speculative buying activity fails to arrest UK forward power price falls
    • German Day-Ahead prices slip back on mild winter temperatures
    • Germany' s power curve slips further ahead of Calendar contract expiry
    • France is NW Europe' s highest priced spot electricity market
    • Forward wholesale power prices in NW Europe continue to converge
  • NW European spot gas price volatility necessitates BBL reverse flows
  • Interim power tariffs deal a further blow to retail competition in France
  • Wholesale gas prices are moving against Excelerate' s UK LNG project
  • Glossary
    • This brief contains a number of industry standard terms
• APPENDIX
  • Further reading
  • Datamonitor Consultancy
  • Ask the analyst
  • List of Figures
    • Figure 1: UK spot gas price, Jan-04 to Dec-06
    • Figure 2: UK forward gas prices, Jan-04 to Dec-06
    • Figure 3: Belgian spot gas price, Jan-04 to Dec-06
    • Figure 4: Belgian forward gas prices, Jan-04 to Dec-06
    • Figure 5: NW European spot gas price comparison, Jan-04 to Dec-06
    • Figure 6: NW European forward gas price comparison, Jan-04 to Dec-06
    • Figure 7: UK spot baseload electricity price, Jan-04 to Dec-06
    • Figure 8: UK forward baseload power prices, Jan-04 to Dec-06
    • Figure 9: German spot baseload power prices, Jan-04 to Dec-06
    • Figure 10: German forward baseload power prices, Jan-04 to Dec-06
    • Figure 11: NW European spot baseload price comparison, Jan-04 to Dec-06
    • Figure 12: NW European forward baseload price comparison, Jan-04 to Dec-06
    • Figure 13: NW European spot price differentials versus Interconnector flows, Dec-06
    • Figure 14: French wholesale power curve versus indicative eligible market and interim retail tariffs
    • Figure 15: Marginal LNG supply versus UK-US price differentials