Tuesday 5 April 2016

Power supply margins to widen this winter – Y report

Power supply margins to widen this winter – Y report

The power supply margin is expected to widen this winter, according to Inenco's Y report.

The news comes as SSE announced it will keep the Fiddler's Ferry coal-fired power plant open until at least next summer.

Energy Trader Rebecca Hermolle said power contracts close to delivery have lost value in recent days due to "healthy" power and gas fundamentals.

She added: "Contracts further out are trading relatively sideways. This is possibly due to recent rally in Brent crude oil."

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However she believes the situation could reverse in the short term and gas and power prices could fall as a consequence.

Ms Hermolle added: "For those customers looking to place a fixed price contract that are relatively in risk of this you could do so now and achieve a good price."

However she warns "there is scope for further losses" if the UK LNG schedule quickens.

Ms Hermolle went on: "For those customers with flexible contracts you could hold for the time being as there still doesn't appear to be a clear direction of where the market is heading."

Written by

Bruna Pinhoni

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