Wind and solar generation up to 39%, while UK power curve loses value
The last 7 days of energy market changes are analysed in Haven Power’s weekly market report.
Here’s a summary of the week starting 7th October:
- Wind and solar contributed almost 40% to the generation stack on 10th October
- A mix of high and low wind output steered day-ahead prices
- National Grid again used high output from pumped storage hydro to balance UK system
- UK power curve moved down for most of the week, before carbon price recovered some value
The expected levels of wind output influenced day-ahead prices during week 41. Prices inflated on days with low projected wind and decreased with the prospect of high wind output.
The week’s highest price for baseload delivery (£67.14/MWh) was for 14th October. Wind output was projected to drop sharply from over 10GW of output to under 2GW, leading to the prospect of more gas generation and the high final price. The lowest price for baseload power (£59.51/MWh) was for 12th October, when the forecast was for high wind output. This materialised during the middle of the day, with wind peaking at over 13GW.
The average of imbalance prices during week 41 was £63.80/MWh – a slight increase compared to week 40 (a trend that’s been repeated over recent weeks). In a number of this week’s settlement periods that coincided with high renewable output, the final imbalance price resulted in a negative number. The week’s lowest price of -£64.66/MWh was for settlement period 44 (21:30-22:00) on 8th October, when wind output averaged 8GW over the day. During this period, National Grid paid a number of wind generators to reduce output; the price they requested would have been enough to cover any lost renewable subsidy revenue.
The highest price for the week was £170.78/MWh for settlement period 21 (10:00-10:30) on 14th October. During this period, the UK system was over 1000MWh short of generation and so the system operator (National Grid) had to take action. Notably, it paid pumped storage hydro station Crauchan £175/MWh for 37.5MWh of power, and £158/MWh to Killingholme Combined Cycle Gas Turbine (CCGT) for 72MWh.
Renewables and other
At 8.2GW, average wind output during week 41 was over 2GW higher than in the previous week. Gas and coal-fired generation made up for the changes in wind output during the week. Wind output reached over 13.5GW during the afternoon of 12th October, contributing 37% of the UK generation stack – a third more than gas-fired at the time.
On 10th October, high solar output for this time of year combined with wind to contribute over 39% of the generation stack – more than gas and coal combined.
Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts lost significant value over the course of week 41. The front season, summer-19, lost over £3/MWh. The UK power curve followed the day-on-day losses on the National Balancing Point (NBP) gas market during week 41, until trading on Friday 12th curbed the steady decline. The downward pressure on the NBP market stemmed from milder temperatures and weaker fuel commodities; the reverse in momentum on Friday resulted from the gain of almost 2% in value for European carbon.
*For more information about Secure and Promote, please consult this Ofgem web page.
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 Summer 19 and Winter 19.
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 us on 01473 707755 quoting reference HP250.
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.