Wholesale gas and electricity prices began to increase during the second quarter of the year, according to new analysis.
A report issued by market intelligence firm ICIS on 8 July said that energy prices had been boosted early in the quarter by supply concerns for both gas and power, and that they increased towards nine-month highs when the UK voted to leave the EU. The collapse in the value of the pound boosted demand for British energy from traders dealing in euros.
The ICIS Power Index averaged £38.12/ MWh over Q216, rising 9% over the previous quarter. Gas to be delivered the following year averaged 36.14p/th––up 12%. This was the first rise for the average gas price since Q313.
Jamie Stewart, electricity editor at ICIS, also highlighted concerns over capacity: “More coal-fired plants have come offline, and electricity supply margins remain tight for the winter […] Rising gas consumption for power generation is also helping to boost electricity prices.”