There have been “big losses” across power contracts today which has been driven by a “weakness in carbon”, according to the daily market report from npower.
Tom Matthews (pictured), Client Portfolio Manager said: “The UK has released their section of free permits to the market. Other European countries are expected to do the same soon which is putting pressure on the carbon market which is feeding into power.”
He added the gas contracts are “roughly flat”, with the system is expected to close the day “roughly balanced”.
As for power, there has been a 20% drop in nuclear generation after the Sizewell B power station had to come offline after a cooling pump failure. Wind is also down “a touch”, Mr Matthews said, however, it is not driving not issues as margins remain above 13GW.
He added: “Temperature forecast has come in slightly cooler which is capping losses on the near curve, however it is nothing significant.”
Mr Matthews suggests keeping an eye out on what happens with the Sizewell B nuclear power station: “If that returns to the grid, we may well see pressure on gas generation which will feed into gas demand.
“On top of this, we’ve got US crude stock data out this afternoon. We saw a big draw last night so if we see another draw again, we may well see some support to Brent which could filter into gas and power curve. So worth keeping an eye out on that.”