UK day-ahead power contracts rose sharply Monday, extending the previous week's strong gains, as market jitters were markedly elevated due to tightening supply margins, sources said.
Baseload power for Tuesday delivery surged to an intra-day high of GBP170/MWh in morning trade, but eased to end at GBP150/MWh before the S&P Global Platts 1100 GMT market close -- a day-on-day increase of GBP57.
Significant gains were noted on the peakload (block 3+4+5) contract, which traded separately as block 3+4 priced at GBP66/MWh and the block 5 valued at GBP600/MWh. This valued the Tuesday peak price GBP102.65 higher than Monday's power at GBP244/MWh.
The publication of the market coupling results in the daily spot exchange auction was delayed Monday as the predefined price thresholds were exceeded which triggered a second auction, according to the N2EX and APX exchanges. At 1226 GMT, the exchanges said the day-ahead auction cleared below the OTC contracts at GBP99.36/MWh for the base and GBP148.29/MWh for the peak in the UK.
"The system is pretty tight [in the UK] as well," a trader said, signaling narrow margins in France.
"There is a lot of risk on the table," he said. "People are a lot more willing to jump big spreads. So, you see the price gapping around."
The nuclear reactor issues in France, which have raised fears of a potential cut in IFA interconnector flows, coupled with falling wind output forecasts and the ongoing unplanned biomass plant outages in the UK, have heightened supply concerns.
According to National Grid, peak wind power generation is expected to nearly halve to 2.5 GW Tuesday, down from Monday's peak forecast of 4 GW. At the same time, the grid expects an uptick in power demand to 49.4 GW Tuesday, up more than 1 GW on the day.
No electricity flows were seen from France into the UK at midday Monday, but around 220 MW of power was exported from Ireland along with 1 GW from the Netherlands, the grid data showed.
Gas-fired power production remained below 20 GW at midday as wind output stayed above 3 GW, while coal and nuclear power generation stood at a healthy 6.6 GW and 8 GW respectively, the grid data showed.
