News / Weekly Energy Report - UK without coal for over 400 hours

Weekly Energy Report - UK without coal for over 400 hours

Read the Haven Power market report to stay updated on the week-by-week changes in the energy market. Here’s our analysis of what happened over the past 7 days, starting Monday 27th May:

  • UK generation mix has worked without coal for over 400 hours (and counting).
  • Power prices headed down as wider fuels complex lost more value.
  • Wind output steered the UK power prompt.
  • The week’s highest and lowest imbalance prices both occurred on Monday 27th May.

Read more below:

6598-Week22 MarketReportImage CoalFree 1920

Prompt/Day-ahead Power

Forecast wind output heavily influenced Prompt power prices during week 22, with the highest prices coinciding with weak output and vice versa. Predictions for low wind generation on Tuesday 28th May led to the week’s highest price, as the system needed to run more gas-fired plant to meet demand.

The higher wind output expected during the rest of the week added more pressure to prices, with its peak on Sunday 2nd June seeing the week’s lowest price. Low demand, warm temperatures and the high wind output meant that gas-fired output averaged just 5.2GW on that Sunday, compared to an average of 12GW on Tuesday 28th May when the wind was low.

2019-06-03 pricingreportgraphs1

Imbalance Prices

Imbalance prices during week 22 averaged £38.12/MWh, with some periods of negative prices on Monday 27th and Tuesday 28th May.

The Monday saw both the lowest (-£64/MWh) and highest (£79/MWh) prices of the week. The former was in settlement period 3 (01:00-01:30), when the UK system had excess generation. The system operator set the final price by accepting bids from Hadyard Hill Wind Farm to reduce output by 35MWh. In contrast, the highest price was for settlement period 16 (07:30-08:00), following on from eight consecutive settlement periods when the UK system had been long (over-supplied).

However, in the run up to period 16, the system was short as it coincided with demand ramping up and wind output declining from its earlier levels. An unknown counterparty set the final price by contributing 97.5MWh; National Grid called upon pumped storage hydro and gas-fired plant to increase output to cover rising demand.

2019-06-03 pricingreportgraphs3

Renewables and other

Output from renewable installations continued to be strong; wind output averaged over 6GW for the seven days and solar peaked at over 5GW on most days of the week. In fact, wind and solar combined to contribute 40% of the generation stack (14.3GW) at around 13:30 on Thursday 30th May.

At the time of writing (Monday 3rd June), there’s been no coal-fired generation on the UK system since settlement period 32 on Friday 17th May. This is a new record: over 16.8 days or 404 hours.

2019-06-03 pricingreportgraphs4

Seasonal Contracts

Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts all lost value over a bearish week of trading.

However, between the market’s close on Tuesday 28th May and its opening the following day, most prices were bullish (rising). An upturn in gas prices was mostly responsible for driving the price of power, although additional influence came from an uptick in the price of carbon, following increased demand.

However, the rest of the week took a bearish turn, with the wider energy complex – including trade on the coal and oil markets – weighing down National Balancing Point (NBP) gas prices. This influence over the power market had an impact upon the longer-dated products on the curve.

Over the last month, the Brent Crude Oil benchmark - a key driver of longer-dated gas and power contracts – has lost over $8/bbl; gas and power have followed suit.

2019-06-03 pricingreportgraphs2

*For more information about Secure and Promote, please consult this Ofgem web page.

Annual Power

The annual power graph shows how the value of an annual power contract changes over time. The annual contract value is the average of the front two seasons, currently winter 19 and summer 20.

2019-06-03 annual-prices

To help you make sense of the industry, you can also use our jargon buster and handy guide to Third Party Costs (currently 60% of your bill). And for interesting articles and useful insights, look out for our blog.

Report written by Thomas Stebbings and Ben Symonds, Haven Power’s Portfolio Analysts. To speak to them, or the rest of our Flex & Portfolio Management team’s analysts, call 01473 707755 quoting reference HP250.

Disclaimer

Although we’ve made all reasonable effort to verify the information in this report and provide the highest possible accuracy, Haven Power Limited gives no warranty - express or implied - in respect of this information. Furthermore, our provision of this report does not constitute advice of any kind and readers should not take it as the basis for any commercial or financial decisions. You should make any such decision based on your own records, knowledge and perception of power market data, supplemented with appropriate independent expert advice when required.

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