(Bloomberg) -- Britain’s natural gas prices declined with wind generation set to recover by Thursday, limiting demand for the fossil fuel.

Day-ahead gas prices in the UK fell as much as 4.1% after gaining 2.8% a day earlier. Front-month gas in the UK added 1.4% on Wednesday before sliding as much as 2.8%.

Gas-fired power plants are meeting more than 40% of Britain’s electricity output, while wind dropped to less than 10% earlier in the day before gradually increasing, according to grid data. 

While output from wind turbines is expected to pick up on Thursday, the fluctuations highlight the role of gas for power generation despite a rise in renewables.

Even if demand for gas in power in general declines, it is needed to fill the gap when there is no wind or sunshine. 

Supplies to the UK have increased, in particular, from its liquefied natural gas terminals. The UK has also relied on its limited storage capacity over the past ten days to meet increased demand over a recent cold snap, grid data shows.

Globally, lower gas prices, even with increased volatility are, “conducive to enabling the needed coal-to-gas switch, which we think has to play an important role in the energy transition,” according to JPMorgan Chase & Co.

Going forward, the growth in LNG market will create an oversupply and push prices down, the bank’s analysts, led by Christyan Malek, said in a note last week.

UK front-month futures fell 2.4% to 69.82 pence a therm at 1:38 p.m. London time. The Dutch front-month contract, the European benchmark, also slipped almost 1% at 2:47 p.m. in Amsterdam.

--With assistance from Priscila Azevedo Rocha.

©2024 Bloomberg L.P.