UK PPAs and Green Gas Market Fundamentals:
- UK Energy prices pull back from highs.
- Price volatility continues particular at the “front end of the curve”.
- Gas remains key focus with some early signs of price stabilisation / possible retracement.
- PPA fixing opportunities to lock in value out to 2024.
Key Drivers :
- European gas storage levels.
- Strong oil market and broader commodity complex.
- Reduced pipeline gas from Russia and Norway.
- Strong Asian LNG buying interest.
- Curtailed liquefaction and reduced U.S. LNG exports post hurricane.
- Coal market tightness.
- It has been reported that the U.K. government could intervene in the UK ETS scheme via the cost containment mechanism (CCM). If the average price for September, October and November falls above £52.88, we will see the introduction of various triggers to maintain price stability.
- The UKA price has since dropped from its highs but the significant premium over the EUA price remains strong.