Platts: Continental European Day-Ahead Power Prices Rose 2.1 % In November - U.K. & Continental Nat Gas Prices Up Vs. October; European Power Down Vs. Nov. 2011

Continental Europe’s day-ahead power and natural gas prices were up in November from October, but on a year-over-year basis they moved in opposite directions, according to Platts, a leading global provider of energy, petrochemicals and metals information. Prices of U.K. power and natural gas were higher month over month and versus a year ago.

The average cost of day-ahead power in continental Europe as indicated by the Platts Conti Index* was €51.20 per megawatt hour (/MWh) in November 2012, up 2.1% from   €50.17 in October 2012. However, year-over-year, European power prices were down 14% from the monthly average of €59.83/MWh in November 2011.

“European power and natural gas price movements in late 2012 continue to reflect a crosscurrent of factors,” said Henry Edwardes-Evans, Platts European power editor. “Near-term power prices can be lifted by cold snaps for short periods, but oversupply and weak underlying demand appear to be quickly reasserting themselves.”

Rising wholesale energy costs can tend to add pressure to the politically-charged issue of end-user bills, with several European countries maintaining regulated tariffs that are contrary to E.U. law. While wholesale power and gas price movements play a key role in the formulation of retail bills, the bulk of end-user charges reflect a host of other costs such as network fees, subsidies and taxes.

Power prices in the United Kingdom increased during November, both on a month-to-month and year-over-year basis, according to the latest Platts price assessments.  November U.K. day-ahead power prices were 48.73 British pounds per megawatt hour (GBP/MWh), up 2.8% from the October price of 47.40 GBP/MWh, and up 5% versus the November 2011 price of 46.41 GBP/MWh.  

Natural gas prices in continental Europe last month were also higher, by a small margin month over month, but by a much larger margin when measured year over year. Platts price assessments show the average cost of day-ahead natural gas at continental Europe’s most liquid hub, the Dutch TTF, was up 2.1% to €27.25/MWh last month. This compares to €23.74/MWh in November 2011, marking a 15% rise year over year.

In the U.K, the November price change for day-ahead natural gas was slightly behind that of Europe, up 2.0% to 65.63 pence per therm (pence/therm) from October’s 64.35 pence/therm. U.K. gas prices were up 12.9% from November 2011, when the average price was 58.15 pence/therm.

“Natural gas prices continue to defy underlying industrial and commercial demand weakness because of oil indexation,” said Edwardes-Evans, “while colder weather and increased heating demand has seen gas drawn out of storage in November, pushing prices upwards.”

NOTE: All figures are monthly averages of daily day-ahead contract prices as

assessed by Platts.     

*Platts Continental Power (CONTI) Index is a demand-weighted baseload average of day-ahead contracts assessed in Germany, Switzerland, France, Belgium and the Netherlands. The index reflects prices as determined between buyer and seller in the open market.  The Platts U.K. assessments reflect day-ahead contracts assessed for firm delivery of power on the high voltage network of England, Wales and Scotland, and at the National Balancing Point for gas.

For more information on electric power or the methodology used by Platts in its power assessments, visit the Platts website www.platts.com.