Platts: March U.K. Power & Gas Prices Surged; Power in Europe Little Changed

Cold Snap Sparked Double-Digit Rise in Natural Gas Prices in U.K. and Europe

U.K. Power Also Spiked but Muted Response by Diversified European Power Sector

Apr 04, 2013, 12:13 ET from Platts

LONDON, April 4, 2013 /PRNewswire/ -- Day-ahead natural gas and power price rose by double digits in the United Kingdom last month on the back of cold weather, with continental Europe sharing in the gas price spike but escaping the power price climb due to greater power generation diversification, according to the monthly day-ahead prices just released by Platts, a leading global provider of energy, petrochemicals and metals information.

The U.K.'s heavy reliance on natural gas for power generation and domestic heat saw March power prices climb 26% from February and 48% from March 2012 as record-low temperatures drew heavily on the country's natural gas storage reserves, the data showed. The average day-ahead price of U.K. natural gas in March was 86.51 pence per therm (p/therm), versus 68.86 p/therm in February and 58.46 p/therm in March 2012.

The average cost of day-ahead power in the U.K. was £61.79 per megawatt hour (/MWh) in March 2013, Platts data showed. This is up 25% from the February average of £49.38/MWh, and up some 35% from March 2012, when the average was £45.78/MWh.

"While the U.K. is running coal-fired power plants hard, natural gas-fired plants remain the marginal unit that determines the power price," said Jillian Ambrose, Platts European power editor. "We see a close correlation between the price of natural gas and electricity in the U.K., more so than in other European markets where diversity is provided by interconnection of coal, hydropower, nuclear and renewables."

This was illustrated by the fact that, while continental Europe also had a cold March and natural gas prices rose sharply, the increase in wholesale electricity prices was much less marked. The Platts Continental Power (CONTI) Index* climbed less than 2% in March compared to February, from €53.95/MWh to €55.02/MWh.

Meanwhile day-ahead natural gas prices at continental Europe's most liquid hub, the Dutch TTF, were up 21% last month versus February and up 24% from March 2012.

"Near-term natural gas prices in the U.K. were already trading more than 100 pence per therm when, on Friday March 22, the U.K.-Belgium Interconnector halted operations and sent within-day gas prices as high as 150 p/therm that morning," said Ambrose. "Both the Interconnector and the Dutch BBL pipeline have been key sources of gas supply during the winter, while liquefied natural gas deliveries have been low compared with last year as suppliers seek the higher prices paid in Asia and South America, bypassing northwest Europe."

Platts Continental Europe and U.K. Day-Ahead Monthly Averages




CONTI (Euro/MWh)




TTF (Euro/MWh)




U.K. Power (GBP/MWh)




U.K. Gas (pence/therm)




Source: Platts

NOTE: All figures are monthly averages of daily day-ahead contract prices as assessed by             Platts.3

*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 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. The Platts assessments reflect prices as determined between buyer and seller in the open physical markets.

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

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