07 February 2022

PPA , GPA and Carbon Markets 2nd February 2022- Market Price Assessment

  • Brent ICE 1st nearby ($/b) 79.53 7.59%
  • TTF ICE Month-Ahead (€/MWh) 76.51 1.19%
  • TTF ICE Cal 2022 (€/MWh) 48.37 5.31%
  • NBP ICE Month-Ahead (p/th) 190.38 -.38%
  • Henry Hub NYMEX ($/MMBTU) 5.71 14.46%
  • NE Asia LNG JKM Platts ($/MMBTU) 28.90 9.29%
  • API 2 ICE Cal 2022 ($/t) 149.06 18.25%
  • DE EEX Base Cal 2022 (€/MWh) 113.91 8.18%
  • FR EEX Base Cal 2022 (€/MWh) 118.32 8.05%
  • EUA ICE Dec'21 (€/t) 64.37 6.08%

Increased Russian Gas Flows  Moves Market Lower

  • European TTF and UK NBP gas contracts moved lower this week as increased Russian gas flows via Ukraine were seen.
  • Data suggested that Russian flows to Europe were at their highest levels since late Q4 2021 but remain well below historic levels.
  • Gas pricing at the front end of the curve was down over 10%.
  • Warmer weather forecasts and increased LNG cargo pressured pricing and bearish market sentiment further.

“There is now clearly warmer weather in the Feb forecast for much of Europe and we are starting to see more molecules of gas both pipeline and LNG.

Obviously the situation in Ukraine remains unpredictable but we can see why we have seen a bit of a market sell off this week.”

Francesca Reay Energy Analyst at New Strea

UK Power and PPAs:
  • Higher wind generation has decreased spot market pricing levels and volatility.
  • Gas pricing remains key to UK power and PPAs.
  • Price momentum appears to be slowing.

PPA Manager

“We continue to advocate PPA and GPA price fixing to protect against further downside risk.”

Jamie Banks PPA Manager at New Stream


Key Drivers:
  • Wind generation.
  • Russian gas flows.
  • European storage levels.
  • LNG cargos.
Carbon Markets:
  • The UK ETS CCM (Cost Containment Mechanism) was triggered for January but no intervention took place as with December.
  • EUA’s are currently trading above 89 €/t, with UKA’s  around 85 £/t.

“We continue to monitor both the UKA and EUA price with potential government intervention on the horizon as we approach the 2021 deadline in April.”

Tom Rees, Energy Analyst at New Stream