The Russian gas threat has led to an increase in power prices, according to the daily market report.
Alex Guiot, Client Portfolio Manager on npower’s Optimisation Desk said: “Power prices are firming on the latest Russian gas cut threats. March ‘15 is trading at £41 per megawatt-hour (/MWh) 75 pence up and the summer ‘15 contract is currently trading at £43.20/MWh, 0.30p up.”
The analyst added: “The payment deadline for the next chunk of gas supply ran out on Sunday and Gazprom have stated that they will cut off Ukrainian gas supplies in two days if they do not receive payment.”
The current gas ‘14 contract between the Ukraine and Gazprom states all gas must be pre-paid before delivery, the analyst added.
Power margins are comfortable with the peak forecast to be 13GW. CCGTs (Combined Cycle Gas Turbine) are providing only 20% of the “stack” again while wind generation remains strong at 6.5GW – a bit less than the latest forecast, Mr Guiot said.