Prices have seen quite a sharp downturn as we enter the October 2023 energy year. October ’23 power ended trading on £104/MWh, so a dramatic reversal from the £400 peaks in August ’22 (and even further from the £700 October ’22 prices at that time). Similar falls have been seen for gas. The key driver for this is the de-risked winter season: the LNG position looks a lot more promising with the Australian strikes finishing and Norwegian gas outages are at an end. Whilst there is still risk associated with the winter, and knock-on price inflation to next summer, prices generally seem more benign. There is of course the possibility of a cold winter putting pressure on gas storage (Winter ’22 was thankfully mild so does not represent a fair comparison of a season without Russian gas), but at present there is renewed confidence reflected in lower prices that are in line with recent lows in June ’23.

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