Weekly Energy Report - Dinorwig balances system – again
18th June 2019
To stay updated on the energy market’s weekly changes, read the Haven Power market report. Here’s what happened in the 7 days since Monday 10th June:
- Dinorwig pumped storage hydro set the highest imbalance price for the second week in a row.
- Secure and promote contracts were down £1.22/MWh from their week 23 prices.
- Wind and solar at their peak covered 35.4% of the UK generation mix.
- Strong wind generation forced Day ahead prices downwards.
Read more below:
Day-ahead baseload power prices averaged £39.49/MWh during week 24, down £1.81/MWh from week 23.
These prices were highest as the week began; for the majority of Monday 10th June, wind output averaged 3.2GW before peaking at 6.8GW at 6pm. This lack of relatively cheap wind generation for most of the day increased the demand for more expensive means of generation, setting the price for delivery at £40.75/MWh. The weekly average for wind output was 6.2GW.
The lowest price for Day-ahead baseload power was £38.41 on Sunday 16th June. This was a response to National Grid’s forecast of wind generation surging to 7GW on Sunday afternoon through to Monday. Such a boost in relatively cheap generation will always take some of the pressure away from more expensive gas generation and lower the price of delivery.
Settlement period 18 (08:30 – 09:00) on Friday 14th June saw the highest imbalance price. In the periods before this, national demand was increasing quickly and gas hit its highest level for the day at 17.6GW. To help relieve pressure from gas, National Grid called upon pumped storage hydroelectric generators to balance the system. For the second week in a row, the final price (£110/MWh) was set by accepted offers from Dinorwig Power Station to increase generation.
Settlement period 47 (23:00 – 23:30) on Wednesday 12th June saw the week’s lowest imbalance price of £14.40/MWh. In the hours leading up to this, wind generation remained strong at 8GW and national demand was dropping rapidly. The final price was set by accepted offers from Pembroke, Staythorpe and Saltend power stations (which all, primarily, burn natural gas) to reduce generation.
Renewables and other
Renewables in the UK were strong at times during week 24, but failed to be consistent.
Wind generation producing of 6.2GW on average, peaking at 10.1GW on Thursday 13th June – the equivalent of 28.5% of the UK’s demand. On the other hand, solar generation was lacking from Tuesday to Thursday and then gained strength from Friday onwards. It peaked at 5.8GW on Sunday 16th June, when it was producing 18.5% of the generation mix.
Put together, these weather-dependant sources of energy peaked on Friday 14th June when they produced 13.1GW. This was enough to cover 35.4% of national demand at the time.
Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts lost, on average, £1.22/MWh in week 24.
On Monday 10th June, there were bullish movements (prices moving up) for coal, carbon and National Balancing Point (NBP) gas; only Brent Crude oil resisted the momentum. These then flipped down on Tuesday 11th June amid weakness in coal and gas futures. Wednesday 12th June saw losses in gas, coal and carbon prices encouraging bearish movement (prices going down). However, these were then cancelled out by late gains on the NBP gas market, leaving the market roughly flat for the day.
Thursday 13th June saw similar movements in the Brent Crude oil and European coal and carbon markets, which all ticked up throughout the day. This gain in value was wiped out by early losses on coal and carbon markets on Friday 14th June, although some contracts regained value by the close of play.
*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 winter 19 and summer 20.
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.
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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