Monthly Price Brief - A Review of European Gas and Power Price Trends: January 2008

Publication Date	March 2008
Publisher	Datamonitor
Product Type	Brief
Pages	23
ISBN Number	not applicable
Product Code	DAT10750

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£1,495.00
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Summary

Introduction

The growing role of wholesale traded energy markets across Europe creates a greater need for players throughout the value chain to be aware of the latest market movements and developments. From the wellhead or power station gate to the end-user, volatility in the spot and forward price of power and gas is creating an increasingly challenging environment for all market participants.

Scope

An examination of the wholesale gas price trends in Europe's three key markets - the UK NBP, the Zeebrugge Hub and the Dutch TTF. An assessment of traded power prices in the UK, Belgian, Dutch, German and French wholesale power markets. Insight and analysis into the impact of wholesale markets on the wholesale / retail price interface.

Highlights

Competition is a key factor in delivering lower household bills. European power markets stayed bullish as 2007 ended on a high. Gas prices showed bullish persistence, edging higher across Europe.

Reasons to Purchase

Establish the current level of wholesale and retail energy prices and the fundamental drivers behind movements in the traded value of gas and power Understand how wholesale pricing impacts different facets of the value chain, identifying the potential to limit risk through hedging strategies Forecast future developments in the traded price of gas and power in order to successfully take advantage of arbitrage opportunities.

Content

CATALYST
SUMMARY
ANALYSIS
- Competition is a key factor in delivering lower household bills
- Despite recent power price increases, the UK is Europe's second cheapest supplier, behind France
- In Europe, year ahead wholesale power prices provide a benchmark driver
- The UK heads the list of cheap European gas suppliers
- The NBP year ahead contract slipped below TTF contracts
- SSE leads the UK's major power suppliers on price
- SSE offers the cheapest residential gas supplies in the UK
- European power markets stayed bullish as 2007 ended on a high
- In Belgium, month ahead contracts rose due to tighter conditions
- In France, all contracts except month ahead appear to have peaked
- In Germany, prices at the near-end of the forward curve spiked in December
- In the Netherlands, month ahead contracts rose significantly
- UK power prices showed few signs of softening in December
- Gas prices showed bullish persistence, edging higher across Europe
- At the NBP, quarter ahead prices softened in December
- TTF displayed resilience as most contract prices continued to firm
- Zeebrugge, like the NBP, saw quarter ahead prices softenTTF displayed resilience as most contract prices continued to firm
APPENDIX
- This brief builds upon Datamonitor's extensive pricing proposition
- Glossary
- This brief contains a number of industry standard terms
- Our analysis builds on other sources to provide greater insight
- Further Reading
- Extended Methodology
- We assess the profitability of fossil fuel plants across northwest Europe
- Our bespoke services can be tailored to your specific needs
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List of Figures
- Figure 1: When compared to its European counterparts, the UK's domestic power bills are the second cheapest, behind France
- Figure 2: Wholesale year ahead prices in Europe are a key element of suppliers' energy portfolios
- Figure 3: The UK's maturing retail supply market benefits from low prices, which places it ahead of the EU's major energy suppliers
- Figure 4: Since the end of 2005, prices at the NBP have been consistently lower than at the TTF, the Netherlands's main gas exchange
- Figure 5: Scottish and Southern Energy and EBICo offer the cheapest bills in the UK residential power market
- Figure 6: SSE is able to keep its household gas bills on hold as its main rivals are priced at a premium to the firm's standard product
- Figure 7: European power markets stayed bullish as 2007 ended on a high
- Figure 8: In Belgium, month ahead contract prices continued to be bullish during December 2007
- Figure 9: Month ahead contracts continued to accelerate upwards, in contrast to the year and quarter ahead contracts
- Figure 10: Prices at the near-end of the forward curve increased, as consistently colder temperatures challenged capacity
- Figure 11: With the exception of quarter ahead contracts, baseload prices rose in response to short-term demands in the Dutch power market
- Figure 12: Although all contracts were bullish, the month ahead contract made the most significant gains on the close of December trade
- Figure 13: Gas prices showed bullish persistence, edging higher across Europe
- Figure 14: Despite bullish month and day ahead contracts, gas prices softened on quarterly deliveries
- Figure 15: Although quarter ahead prices fell, this was the exception, as day and month ahead contracts continued to firm
- Figure 16: Apart from the quarter ahead product, Belgian gas prices have shown a gradual upward climb, much like the rest of Europe
- Figure 17: Energy pricing proposition
- Figure 18: Generation spread methodology