The major energy surprises of 2019

We review the major energy surprises & industry trends of 2019, including a score check of the 5 ‘potential surprises’ we set out in Jan-19.

Timera Angle

Tommy Rowland joins Timera

Tommy has joined Timera as an Analyst.  5 facts about Tommy:

Smartest – Market Analyst: Tommy joins Timera from Smartest Energy where he was a Market  Analyst working on fundamental analysis of power & gas markets and using machine learning to develop prompt trading & backtesting strategies.

Smartest – Volume Risk Analyst: Before this Tommy was working on Smartest Energy’s long-term generation and supply portfolio imbalance position, as well as supporting the development of new supply products.

Solar Century: Prior to Smartest Energy, Tommy started his career with solar developer Solar Century.

Education: Tommy has a MSc. Materials for Energy & Environment from UCL and a BSc (Hons.) Biochemistry from University of Kent. He’s also done an Applied Data Science course with Cambridge Spark.

Other stuff: Outside of work, Tommy enjoys playing Padel Tennis, and like some other members of our team is a keen sailor.

Tommy brings strong market and analytical skills as well as practical commercial experience from his industry background.

Jon Brown joins Timera

Jon Brown has joined Timera as a Senior Analyst.  5 facts about Jon:

EDF – Quant Analyst: Jon joins Timera from EDF Energy where he was a Senior Quant Analyst, with responsibility for analysing the impact of embedded optionality of flexible assets as well as developing analytical tools (e.g. battery optimisation).

EDF – Risk: Before this Jon was a Senior Market Risk Analyst at EDF Energy, working on developing & implementing risk measurement & portfolio limit solutions (e.g. using EaR, VaR).

South Hook LNG: Prior to EDF Jon was a Senior Optimisation Analyst for Sth Hook terminal, responsible for pricing all 3rd party cargo deals & developing a probabilistic analytical framework to support this.

Education: Jon has a degree in Financial Economics (Hons) as well as other qualifications in financial engineering & risk management (e.g. GARP, CISI Derivatives, CFA)… and he’s a Python ‘black belt’.

Other stuff: Outside the office Jon is a keen triathlete, has run the London marathon and is a bit of a card sharp (sponsored poker player).

Jon brings strong quant analytical skills which are grounded in practical commercial experience from his industry background.

Steven Coppack joins Timera

Steven Coppack comes onboard Timera as a Senior Analyst.  5 things Steven has done prior to joining our team:

Total – Energy trader: Creating and executing trading strategies across European power and carbon markets, including building analytical models to aid trading strategies.

Total – Market analyst: Delivering analysis of European power, gas & carbon markets to senior management. Generation stack modelling to analyse power price dynamics in European markets.

EDF – Shift trader: Managing & optimising short-term UK power and gas exposure of EDF Energy’s UK thermal generation fleet.

EDF – Analyst: Conducting analysis to support customer product structuring and pricing of PPAs for renewable generators.

University: Steven has a MPhys in Physics and Philosophy with First Class Honours from the University of York.

Steven brings strong practical commercial & analytical experience from his industry roles, particularly on European power markets.

Timera is moving office

When? On 1st Sep 2019 Timera Energy is moving offices from its current 110 Bishopsgate address.

Where? We are moving to Level 12, 30 Crown Place (the Pinsent Masons building), 5 mins from our current address.

Why? Timera is growing fast (more exciting news to follow shortly).  We need more desk & meeting room space to accommodate our expanding team and client base.

What next? Full details on new address and contact details to follow before the move.

Timera is recruiting analysts

As we continue to expand our team, we have several Analyst positions open.  Why join Timera as an Analyst?

  1. The Challenge: Your focus will be on understanding & analysing the flexibility that lies at the core of the energy transition.
  2. Development: We have a flat hierarchy where analysts interact dynamically with senior team members and clients and have the space to apply initiative and take on responsibility.
  3. Remuneration: Our packages are very competitive and include participation in company growth.
  4. Flexibility: We offer significantly more flexibility and autonomy than other companies, covering e.g. location, work hours & remuneration structure.
  5. Team culture: We have an open, innovative & entrepreneurial environment, working together on a variety of stimulating analytical challenges across the rapidly evolving energy industry.

See Analyst Job Spec and more details on Working with Timera.

Timera Snapshot

TTF seasonal spreads reach 10 year high

Seasonal spreads have risen sharply in past weeks, with TTF S20-W20 reaching a 10 year high (4.75€/MWh) in early January. Several bearish factors have pushed Summer 20 prices down: renewal of the gas transit agreement between Ukraine and Russia, high LNG deliveries in Europe, record high stock levels. This is increasing the value of storage capacity at a time where Storage System Operators are usually starting to market capacity for the upcoming storage year.

Storage capacity prices highest since 2012

Gas Terra runs a bi-annual auction for storage capacity. This is one of the most transparent benchmarks for market pricing of seasonal storage flex. The chart shows depressed storage prices across the 2014-18 period, with auctions clearing at an average of 2.0-2.5 €/MWh. But a recovery in TTF seasonal price spreads in 2019 has seen capacity prices more than double over the last year.  The late 2019 auction cleared at 4.9 €/MWh, levels not seen since 2012.

Spanish LNG imports switch out coal

2019 has seen a near phase out of Spanish coal by market forces as shown in the chart.  Spain has been one of the biggest receivers of surplus LNG, with imports surging this year. This has caused periods of reversal of what has historically been a structural premium of Spanish gas prices over TTF. The combination of low gas prices, stronger carbon prices & changes to CCGT taxation, have seen gas plants load factors surge at the expense of coal.  Market forces are reinforcing policy pressure to accelerate the closure of Spain’s 10GW coal fleet.

TTF seasonal price spreads breaking out

The value of seasonal gas flex is surging again in Europe. In Q1 2019, forward price spreads for Sum-19 / Win-19 rose sharply (above 4 €/MWh). This was driven by high storage inventories and rising LNG import volumes. It looks to be déjà vu again for the Sum-20 / Win-20 price spread, but the surge is happening earlier this time round.  Forward spreads have risen to 3 €/MWh in Q4 2019 as expectations of surplus LNG push down Sum-20 prices.