Wholesale power prices hit a four-year low, and remain under pressure for 2015

12 January 2015

The ICIS Power Index Q4 analysis explains the decline of wholesale power prices in the UK.

ICIS, the independent authority on UK energy market pricing, has highlighted that the same factors pushing the ICIS Power Index (IPI) to multi-year lows in January are expected to continue this year, detailed in its fourth quarter (Q4) analysis.

The IPI, which reflects wholesale power prices over a year of delivery, shows that electricity prices fell 11% from the end of 2013 to the end of last year. ICIS analysts say that this is a result of a gas glut in the UK market, incurred from higher storage levels and an increase in the import of liquefied natural gas (LNG).  

Wholesale power prices have steadily declined to their lowest value in four  years in the first trading days of 2015. The IPI reached £44.627/MWh on 8th January 2015, and the market expects gas oversupply and lower demand to continue. 

“Electricity prices have lost a lot of value in 2014, and many of the same factors that depressed values last year, in particular the oversupply of gas and more renewable energy, are still in place for 2015,” says Zoe Double, Head of Power, ICIS. “This means that the part of the household electricity bill made up of energy costs is falling, and wholesale energy prices could fall further in the future.”

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 Q4 analysis shows that the trends of storing excess gas and strong liquefied natural gas (LNG) imports are likely to continue into 2015, with temperatures warmer than average for the winter months to date, and more global LNG production starting up next year.

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 Q4 2014.

Tara Sabanandan, Marketing Manager, ICIS
Email: tara.sabanandan@icis.com
Direct: +44 (0) 207 911 1713

About ICIS

ICIS is the world's largest petrochemical market information provider and has fast-growing energy and fertilizer divisions. Our aim is 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. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.

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. Some 350 of ICIS’s staff are journalists engaged in reporting market prices and news, and ICIS is fully committed to upholding the highest journalistic principles of verification, corroboration and authentication. ICIS has a compliance framework that along with its methodologies and business processes adheres to the requirements of the IOSCO PRA Principles.

ICIS is a division of Reed Business Information, part of RELX Group.

About Reed Business Information

Reed Business InformationReed Business Information provides information and online data services to business professionals worldwide. Customers have access to our high-value industry data, analytics, information and tools. Our strong global brands hold market-leading positions across a wide range of industry sectors including banking, petrochemicals and aviation where we help customers make key strategic decisions every day. RBI is part of RELX Group plc, a world-leading provider of information solutions for professional customers across industries.

About RELX Group RELX Group

RELX Group plc is a world-leading provider of information solutions for professional customers across industries.

We help scientists make new discoveries, lawyers win cases, doctors save lives, and executives forge commercial relationships with their clients. We help insurance groups offer customers lower prices by assessing risk better, and save taxpayers and consumers money by enabling governments and financial groups to detect fraud.

ICIS Power Index (IPI)

The ICIS Power Index (IPI) gives homes and businesses an insight into price trends on the UK wholesale electricity market.

The IPI is published daily by ICIS, an independent authority on UK electricity market pricing, and is available at no charge.

Find out more 


Price assessments, indices, news and analysis for the oil, gas, liquefied natural gas, carbon and coal sectors.