News / Weekly Energy Report - EU helps lift UK power curve

Weekly Energy Report - EU helps lift UK power curve

17th September 2019

Stay updated on last week’s events in the energy market with Haven Power’s market report. Here’s our summary covering the past 7 days, starting Monday 9th September:

  • Concerns over maintenance at EDF’s French nuclear facilities drove power prices higher.
  • An EU ruling reducing Russia’s use of the OPAL gas pipeline also boosted European gas.
  • Weekly averages for wind and solar output both fell week-on-week.
  • Imbalance price reached weekly lows of -£61/MWh for 2.5 hours on 11th September.

Read more below:

Prompt/Day-ahead Power

The day-ahead baseload price for Monday 9th September jumped 20% higher than the day-ahead price for Friday 6th September, mainly as a result of low wind output. National Balancing Point (NBP) prompt gas prices also surged, as colder weather and the low levels of wind generation caused a sharp increase in demand.

The prompt price for delivery on Tuesday 10th September rallied as it gained support from the NBP day-ahead. High gas demand and planned maintenance on the Easington terminal supported the gas contract’s rise. Continued low levels of wind generation also helped provide some upward momentum to power day-ahead.

On the following day, the contract for day-ahead delivery was under heavy selling pressure following a steep rise in wind output: day-on-day average wind generation increased by 7.5GW. After opening lower than the previous day’s close, the NBP day-head rallied strongly – although this didn’t have a significant impact on prompt power prices.

Day-ahead prices for Thursday 12th September jumped up, as wind generation fell from the highs seen on Wednesday. As wind output declined, National Grid called upon Combined Cycle Gas Turbine (CCGT) power plants – a more expensive form of generation – to meet demand, pushing prompt prices higher. As wind output slid down further the next day, prices for delivery on Friday 13th September edged higher to reach the levels seen at the start of the week.

2019-09-16 pricingreportgraphs1

Imbalance Prices

The highest imbalance price in week 37 was £75/MWh, set on Monday 9th September during settlement period 20 (09:30 – 10:00). This was caused by offers to increase production from four Balancing Mechanism (BM) units across the portfolios of two generators. These units, which were all small capacity gas power plants connected to the grid at the distribution level, included Letchworth Embedded Power Plant in Bedfordshire and Water Lane Power Station in Devon.

The system price went negative during the early hours of Wednesday morning, dropping to the lowest price of the week (-£61/MWh) between periods 2 and 6 (00:30 – 03:00). This price was set by accepted bids to reduce generation from two of the biomass units at Drax Power Station, in North Yorkshire.

2019-09-16 pricingreportgraphs3

Renewables and other

Over Monday 9th and Tuesday 10th September, levels of wind generation remained low: the respective daily averages were 3.1GW and 4GW. Solar output also had poor levels of generation at the start of week 37, as it struggled to rise above 5GW and hit a low of 2.1GW on the Monday.

Wind output had a significant increase during Wednesday 11th, reaching the highest peak of week 37 (13.95GW) at around 12:30. Wind’s daily averages then fell over Thursday 12th and Friday 13th September, with the average on the latter just below 5GW.

Solar output picked up going into the weekend, as generation reached the highest level of the week (7.4GW) on Friday 13th . Solar remained high on the following day, although the Sunday saw it drop down to the lower levels seen at the start of week 37.

On Saturday 14th September, wind rebounded until it reached 10.3GW in the early hours of Sunday 15th. Generation levels then fell throughout the remainder of the last day of the week, hitting lows of 2GW in the late evening.

Weekly solar averages dropped from 1.6GW to 1.5GW from week 36 to week 37. Wind generation averages were also lower on a week-by-week basis, falling from 8.05GW to 6.5GW.

2019-09-16 pricingreportgraphs4

Seasonal Contracts

Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts moved higher by £2.25/MWh on average over week 37.

On Monday 9th September, secure and promote contracts were up on the previous day’s close. NBP gas and EU Allowance (EUA) carbon both finished flat on the day after rallying during the morning. Rotterdam coal and Brent crude oil both found gains on the day, which helped to support the UK power curve.

The following day, the curve rallied strongly due to two main factors: the availability of French nuclear power and a court ruling over the Opal gas pipeline. The first news was that several EDF nuclear reactors had been affected by improper welding, potentially leading to a shut down for maintenance. This posed a risk to reactor availability and provided bullish momentum to the power curve. The EU ruling to reduce Gazprom’s usage of the Opal gas pipeline led to bullish NBP equivalent contracts also providing support to power contracts. The ruling means that Russian gas will be more reliant on other pipeline routes, causing more risk of a rise in European gas prices. Both factors meant that the NBP and power front seasons made intra-day gains of 13.7% and 10.2% respectively.

Curve prices for Wednesday 11th September fell slightly after the previous day’s price spike. This was partly due to the reduced risk of large-scale outages after the announcement that faults affected only 20 of France’s 58 nuclear reactors. In addition, bearish EUA carbon and Brent prices helped put downward pressure on the UK power curve.

On Thursday 12th September, prices for secure and promote products continued to fall following bearish NBP equivalent prices. The movements of the rest of the energy complex were mixed: carbon and coal made small gains on the day and Brent crude was slightly down by the close. There were further losses on the power curve over Friday 13th September, in reaction to weaker prices on NBP equivalent contracts.

2019-09-16 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.

2019-09-16 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 and George Goodhew - 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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