Wholesale UK gas and electricity market prices are at their lowest quarterly average in five years.
That’s according to an energy trends analysis ‘Power Index Q2 2015’ by price reporting agency ICIS.
The findings state the falling oil price and strong liquefied natural gas supply (LNG) earlier this year have pushed the UK quarterly average prices down to their lowest level since Q1 2010 – with an average of 47.1 pence per therm (p/th).
The report added the influence of gas on power prices has pulled the Power Index down to its lowest average since Q2 2010, at £44.72/MWh.
Zoe Double, Head of Power at ICIS, said: “The falling oil price and the currency impact from ‘Grexit’ [Greek exit] fears are pushing down UK gas prices and the effects are clear on the UK power price as well.
“The UK continues to draw liquefied natural gas from all over the world, as the number of trading counterparties means Britain can absorb more than other markets.
“Meanwhile, power prices are coming down as more renewable generation is installed.”
However, ICIS highlights the uncertainty over whether these price falls will continue into Q3.
The UK is holding less gas in storage than last year and continental gas markets may need more supply from the UK – as Dutch domestic production has been capped and Ukraine is likely to purchase more from European traded markets, the report added.