UK power and gas prices strengthened through March due to a less favourable supply outlook. The main supporting factor was concerns over Liquid Natural Gas (LNG) supply from the US with EQT announcing a reduction in production due to low gas prices in the US. There was also additional maintenance announced at the US LNG terminal Freeport, which will see exports curtailed until May. This supported gas prices across Europe, as the US accounted for 55% of NW Europe’s LNG supply in 2023.

Confirming supply concerns, average UK LNG send out fell to just 14mcm/day through March, compared with 93mcm/day in March 2023. Exports from the US were lower due to the reduced production, and an increase in demand from China diverted cargoes East. LNG send out in North West Europe however remained healthy in March; 10% higher than February and 4% higher than March 2023. Also easing supply concerns and reducing upside price movements were healthy imports from Norway despite some short-lived unplanned outages in the month.

Switching to power, wind generation was below average overall, contributing to 29% of the UK fuel mix. UK nuclear generation reached 4.3GW by the end of March, an increase of 0.5GW compared to the start of the month. Reactors at Heysham and Hartlepool were taken offline at the start of the year due to an issue with steam valves, and they have now returned to service following multiple delays. Net imports through the interconnectors were 30% higher in March than in February, aided by the return of the 1MW IFA2 interconnector which returned in February from an unplanned outage. French nuclear generation remained at relatively healthy levels, and 12% above levels seen in March 2023.

Looking at the wider commodities, oil also saw strength through March, gaining 6% to close over $87/bbl which was the highest level since October 2023. Geopolitical risks continued to support prices, with concerns over supplies as the Hamas-Israel war continues. At the end of the month, Iran also became directly involved in the conflict as their embassy in Syria was targeted by the Israeli military; Iran accounts for around 4% of global oil production. UK carbon gained 6%, however remains over 50% below the price 12 months ago. Coal also gained as the Baltimore Bridge collapse is expected to block coal exports from the port for six weeks.

NW Europe has ended the Winter-23 season with record high gas in storage for the time of year, at 57% of capacity. This will limit gas demand through the summer months as there will be less gas required for injections. We have also had a mild start to April, and latest forecasts are indicating temperatures will remain above average through to the end of the month. Latest forecasts show above average wind and solar generation for the first half of April, which will also limit gas demand for power generation.    

Monthly price change (29th February vs 31st March): 

 PriceMonthly Change
UK Summer-24 power£62.99/MWh▼ 6%
UK Summer-24 gas69.43p/thm▼ 11%
Carbon£3740/t▼ 6%
Oil (Brent)$87.48/bbl▼ 5%