State of the Energy Market – 18th July 2022

Daily Updates

We start the week with the first ever red level weather warning from the Met Office. So you might not be surprised to hear that the amount of electricity that we’re generating from solar sources has been quite high today (18th July). For one of the afternoon slots, we produced just over 20% of our requirements through solar photovoltaic generation.

However, as you might also expect, with the extreme heat there’s usually not much wind and during the same afternoon slot we generated just 7% of our power through wind generation – this left gas to make up the lion’s share of 49% power generation. The remainder saw a small amount of coal, and larger amounts of nuclear, biomass and hydro making up the difference.

Wholesale prices today have mainly been continuing their downward trend with Aug 22 gas bouncing between 1% and 5% drops and Winter 22, trading between 0 and a 3% drop. In a break with tradition, power decoupled with gas to trade slightly above Friday’s closing prices for Winter 22.


August 22 wholesale power prices dropped by 10.9% to close at £227.70 per MWh.


August 22 wholesale gas prices dropped by 15.4% to close at £200.29 per therm.

In other energy related news:

  • One reason that we’ve seen European gas storage levels reach 5 year average levels, following record lows only a few months ago, is the healthy supply of LNG deliveries that Europe has received in the first half of the year. Prior to the fire at the Freeport LNG facility in Texas in mid June, we were seeing record LNG deliveries reaching Europe. President Biden had recently said that the US would do everything it could to help Europe to replace the reduction in gas coming from Russia following their war with Ukraine and President Putin’s refusal to continue supplying ‘unfriendly’ countries that refused to pay for Russian gas in roubles. However, it is interesting to note that during the first half of the year, China’s extended Covid 19 restrictions and the slowing down of the Chinese economy led to China importing only 4.8 million tons per month of LNG in Q2 22. This was a dramatic drop of 1.8 million tons on the same period in the previous year. It will be interesting to see if Q3 22 will be a period of economic recovery for China. If it is, importing that additional 17% of LNG we need before the 1st Oct, might be a little more tricky.
  • The UK government has unveiled plans to ban the sale of new fossil fueled mopeds and motorbikes by 2035 and by 2030 for other specified vehicles. A consultation that is due to end on 21st September proposes that new L-category vehicles (light weight vehicles with two, three or four wheels) will no longer be allowed to be sold beyond the proposed dates. Currently, L-category vehicles make up approximately 3.3% of all licensed vehicles but they are responsible for only 0.4% of all transport greenhouse gases.
  • Staying on the theme of vehicles, the UK government figures show that battery electric (BEV) car sales have overtaken the sale of diesel cars for the first time. Statistics for Q1 22 reveal that 64,000 BEV registered sales compared to 34,000 diesel car sales. This was a 102% increase for BEV cars compared to Q1 21, while petrol cars saw a fall of 11% and diesel saw a fall of 52% over the same period.

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