Wholesale energy prices fell to record lows in April
15 May 2020
This week we look back at wholesale power price development throughout April, a month which saw notable bearish price movements.
The most prominent of these were the movements in the day-ahead power price. Across April the price averaged €28.0/MWh, the lowest monthly average since the commencement of project I-SEM back in October 2018 – highlighted in Figure A.
The monthly average also represented a €6.3/MWh reduction on the previous month, and a €21.4/MWh discount year-on-year. Power prices were influenced by the well documented drop in demand stemming from COVID-19 measures, which has seen power demand fall by 20% on average since the start of March.
Prices were also dragged lower by other market movements as day-ahead NBP gas prices dropped 40%, reaching a 14-year low mid-month. While Brent crude oil and coal prices dropped 23.1% and 19% month-on-month respectively.
It should also be noted that downward power price movements would have been pegged back by low wind generation throughout the month – which accounted for 25.1% of the generation mix last month, the lowest levels this year. Therefore, if conditions were equally windy as the previous month, we could have observed even lower power prices in April.