Another Rapid Export PPA Market Spike

[AlexMcGowan]

A quick market update;

With the rapid rise in gas prices, caused in no small part by delays to the Russian supply, the electricity market is following suit.

Combining this with low wind output, and we're experiencing another significant market spike, increasing the forecasted pricing for 2022 significantly.

The day ahead rate today sits at £271/MWh for those not on fixed rate deals. Whilst baseload power prices for January and February reach highs of £350/MWh. Summer and Winter 22' are currently forecast to average at approximately £170/MWh.

If you complete your tenders yourself, now would be a good time to begin negotiating, if you'd like assistance in navigating the market, and would like to ensure all options are assessed, then please don't hesitate to contact me at [email protected].

If anybody deals with their export negotiations themselves, but has questions about the above, then feel free to contact me also, I'm happy to help any generators maximise their systems profitability in any way that I can.

 

[e3120]

Alex, are there strong (any) prices out there for 2023? Would you consider it prudent to lock in that far in advance?

 

[AlexMcGowan]

Alex, are there strong (any) prices out there for 2023? Would you consider it prudent to lock in that far in advance?

Forecasts show 2023 averaging at just over £100/MWh, with winter pricing circa £10/MWh stronger than summer as per the norm.

With regards to securing longer term deals, my customers often ask the same question, and I always say the same thing; I believe it comes down to a business decision.

Energy supplier's offers will always be based upon the forecasted pricing during the entire contracted period, so the question is whether you as a business would like to spread the current high rate situation over a long period of time, or take the higher 12 month offer to offset rising costs in other areas of business during this chaotic time.

For example if a generator still uses a large amount of energy from the grid, then I would recommend a 12 month offer to offset the rise in import electricity and gas prices. If the customer was largely self sufficient then a longer term deal offers greater cashflow security and stability. This also goes for overhead costs unrelated to the energy industry, I hear fertiliser is through the roof for example.