The ICIS Power Index Q1 analysis highlights the global nature of UK energy markets as prices decline further.
ICIS, the independent authority on UK energy market pricing, has highlighted the continued fall in UK wholesale energy prices, shown by the ICIS Power Index (IPI) reaching its lowest point ever. ICIS’ analysis of trends during the first quarter (Q1) of 2015 details how global energy markets are having more impact on the UK, pulling down prices.
The IPI, which reflects wholesale power prices over a year of delivery, shows that electricity prices have averaged their lowest in four years during Q1. ICIS analysts say that this is a result of continued gas oversupply, with rising production of liquefied natural gas (LNG) around the world and more coming to the UK, and also the influence of other global markets such as Brent crude oil and coal.
Wholesale power prices have declined to their lowest point since the start of IPI calculation in 2011, hitting its lowest level to date on 26th January at £43.573/MWh.
For Q1 as a whole, the IPI averaged £45.10/MWh – 10% less than the IPI’s average for Q4 2014 of £50.40/MWh, reflecting how prices have fallen over the shorter term.
The Q1 2015 average was also 6% lower than the lowest previous quarterly average since the IPI’s first calculation, in Q3 2012.
“Wholesale energy market prices are under increasing pressure from macroeconomic factors,” says Zoe Double, Head of Power, ICIS. “The UK is now part of a truly global gas market with more liquefied natural gas availability, and oversupply on energy markets elsewhere in the world is having an impact on wholesale energy prices here, with the fall of Brent crude oil and lower coal values.”
The IPI delivers independent insight into the complex world of wholesale power prices for both households and industrial electricity consumers, based on real market trading. The most recent Q1 analysis shows that the trend of increased liquefied natural gas (LNG) imports is likely to continue, and macroeconomic indicators are also pressuring UK energy prices.
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 2015.
Tara Sabanandan, Marketing Manager, ICIS
Direct: +44 (0) 207 911 1713
Rosie Williams, Aspectus PR
Direct: +44 (0) 20 7092 8127
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