London — Generating margins for 35% efficient UK coal-fired units for the quarter-ahead (Q4) contract, have hit their highest so far in 2018, while month-ahead and season-ahead margins rose on bullish gas and delays to the return of French nuclear reactors, traders said Thursday.
Data from S&P Global Platts shows, the Clean Dark Spreads for the Q4 2018 contract, rose to GBP2.25/MWh Wednesday, the highest since December 18, 2017 when it hit GBP2.85/MWh. CDS is the profitability of power produced at a 35% efficient coal-fired power plant, after taking into account the cost of coal and emissions.
Similarly, the CDS for month-ahead, September, was at minus GBP1.73/MWh Wednesday, the highest since GBP0.36/MWh on March 12.
The season-ahead CDS for winter-2018 stood at GBP3.08/MWh on Wednesday, a three-month high.
"Bullish CDS are due to rising gas prices, more delays and news about French nuclear reactors," a trader said
Meanwhile profit-margins for 50% efficient gas-fired units for Q4 edged down slightly to GBP6.26/MWh down down by more than 16 pence day on day on Wednesday. The CSS refers to the gross margin of power produced at a 50%-efficient gas-fired power plant after accounting for the cost of gas, carbon price support, and emissions.
The CSS for quarter-ahead was little changed day on day at GBP6.69/MWh for Wednesday compared with Tuesday's GBP6.65/MWh. Season-ahead profit-margins for Winter-2018 for 50% efficient gas-fired units was down at GBP6.21/MWh Wednesday from GBP6.43/MWh on Tuesday.
Coal-fired generation picked up earlier in the week due to low wind, French nuclear constraints and lower thermal availability.
At noon London time Thursday, gas-fired generation was nearly 14 GW, or around 46% of the total generation mix, while coal fired output was at 767 MW or 2.5% of the total supply mix.
Daily coal-fired output hit 1.6 GW on Monday to fall nearly 800 MW on Wednesday, data from National Grid shows.
