The ICIS Power Index Q2 2016 analysis shows UK gas and power prices have reversed a two-year downward trend
London, UK, 8th July 2016 – Wholesale UK gas and electricity prices begun to climb during Q2, according to analysis of the energy markets published by ICIS, the independent authority on energy market pricing.
UK energy prices were boosted early in the quarter with supply concerns for both gas and power, and rose further towards the end of the quarter with shifting sentiment over the EU referendum.
The Brexit result then pushed prices towards nine-month highs, due to the collapse in value of the pound, which boosted demand for British energy from traders dealing in euros.
The ICIS Power Index (IPI) averaged £38.12 per megawatt-hour (MWh) over Q2, rising 9% over the previous quarter. Gas to be delivered the following year averaged 36.14 pence per therm (p/th) – up 12%.
This was the first rise for average gas prices since Q3 2013, while power prices rose for the first time since Q4 2014.
‘Gas maintenance has boosted buying activity in the market during Q2, but the fall in the value of sterling has made UK gas more attractive to European buyers, boosting British prices as a result,’ said Tom Marzec-Manser, Gas Editor at ICIS.
‘More coal-fired plants have come offline, and electricity supply margins remain tight for the winter,’ said Jamie Stewart, Electricity Editor at ICIS.
‘Rising gas consumption for power generation is also helping to boost electricity prices.’
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 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.
ICIS is an independent price reporting agency focusing on global energy, petrochemical and fertilizer markets, and we have covered the complex UK electricity market for nearly two decades. Every day, we assess electricity contracts for more than 40 different delivery periods in the UK market alone. The analysis and data that we produce is widely used as a reference price in energy contracts.
It is our aim to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions.
With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo and Perth. ICIS is a division of Reed Business Information, part of Reed Elsevier Plc.
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