News / Weekly Energy Report - High winds pressure day-ahead price

Weekly Energy Report - High winds pressure day-ahead price

1st October 2019

Get up to speed on the energy market’s movements for the past week with the market report from Haven Power. Here’s what happened over the last 7 days, starting Monday 23rd September:

  • Friday 27th September saw day-ahead power fall to its lowest weekday price for 16 days.
  • Weekly average wind generation increased by 66% and made up 27.3% of the UK energy mix.
  • Average weekly solar generation fell by 47% in week 39.
  • Falling energy complex prices drove seasonal power contracts lower.

Read more below:

Prompt/Day-ahead Power

The day-ahead price for Monday 23rd September was up from the previous Friday’s close following a drop-off in wind output during the morning. The NemoLink Interconnector went offline for planned maintenance as the week started, removing 1GW of import capacity between the UK and Belgium and helping to support the day-ahead price.

The following day, Tuesday 24th September, prompt prices were mostly unchanged. A small rise in average daily wind generation was counteracted by a marginal rise in the National Balancing Point (NBP) day-ahead price.

Prompt prices for delivery on Wednesday 25th September moved higher due to falling wind output, with the average daily generation dropping from 7.65GW to 5.3GW. The NBP day-ahead price also rose due to the increased gas demand, as more gas-fired power plants were called upon to make up for the drop in wind output. However, a day-on-day drop in demand on the grid stopped the day-ahead power price from rising further.

A rise in wind production helped pressure the day-ahead price for Thursday 26th September. This occurred as more expensive forms of power generation, namely gas-fired plants, were pushed out of the generation mix. Prompt power was also under pressure from a falling NBP day-ahead price; this was trading lower because of a 26% daily increase in the amount of Liquefied Natural Gas (LNG) that UK terminals sent out.

The day-ahead price for Friday 27th September moved down, mainly driven by lower demand. Average daily demand dropped from 30.4GW to 29.5GW from Thursday to Friday. The NemoLink Interconnector also returned from maintenance late on Thursday evening, pressuring the day-ahead price. A nudge up on the NBP day ahead plus a slight drop in wind output helped prevent the power prompt price from falling further.

2019-09-30 pricingreportgraphs1

Imbalance Prices

Imbalance prices were positive in all settlement periods during week 39. The highest price of the week was £84/MWh, in period 19 (09:00 – 9:30) on Monday 23rd September, set by accepted offers to increase generation from a single generator, VPI Immingham. This is a 1.24GW gas-fuelled combined heat and power (CHP) plant near Immingham, on the south bank of the Humber river.

The lowest imbalance price of the week (£2.50/MWh) was set on Friday 27th September during settlement period 6 (02:30 – 3:00). This was set by a single accepted bid (submitted to the balancing mechanism by an unknown party) to reduce generation or increase consumption.

2019-09-30 pricingreportgraphs3

Renewables and other

Wind output ramped up over Monday 23rd September from around 5GW in the morning to highs of 12.25GW during the late evening. Over the next two days, wind generation fell steadily to reach lows of 4.35GW on the morning of Wednesday 25th September.

During the next day, wind generation rebounded to reach levels of 11.35GW and then remained above 7.5GW until Saturday afternoon (28th September). At that time, it briefly dropped to lows of 5.6GW before bouncing back to 9.9GW on the morning of Sunday 29th September. There was a big increase in the average weekly wind output, from 4.85GW to 8GW week-on-week.

Levels of solar generation were quite poor during week 39, with peaks struggling to reach above 4.5GW and the weekly average dropping from week 38’s 1.75GW to just 950MW. The highest peaks were on Monday 23rd, Thursday 26th and Saturday 28th September with a range from 4.3GW to 4.45GW. The lowest level of just 2.5GW occurred on Sunday 29th September.

2019-09-30 pricingreportgraphs4

Seasonal Contracts

Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts fell by £0.60/MWh on average over week 39.

On Monday 23rd September, curve power contracts lost value as they tracked losses on equivalent NBP contracts. The Dec-19 EU Allowance (EUA) carbon price also made losses on the day, providing pressure to long-term power prices. However, Brent crude made marginal gains on the day after trading lower than the previous day’s close in the morning.

On average, seasonal contracts made further losses the next day due to a generally bearish (downward moving) energy complex. The NBP curve, Brent crude, plus carbon and coal contracts all made losses on the day. There was a brief rally in carbon during the morning due to the ruling from the UK Supreme Court that the prorogation of Parliament was unlawful. The market appeared to believe that this indicated a no-deal Brexit was less likely, which provided a bullish driver (a rising price trend) to EUA carbon.

On Wednesday 25th September, the power curve continued to lose value as it tracked losses on the energy complex. The largest losses were seen on Rotterdam Cal ’20 coal, which fell 2.3% on the day; it’s dropped just over 7% since 17th September.

The power curve rebounded on Thursday 26th September following bullishness in the energy complex; EUA Dec-19 carbon, NBP curve products and Rotterdam Cal ’20 coal contracts all made gains.

On Friday 27th, after making gains in the morning,curve power products finished the day’s trading session down from the previous day’s close. The carbon price was one of the main factors driving the power curve lower; there was a 1.3% day-on-day drop in the EUA Dec-19 contract.

2019-09-30 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.

2019-09-30 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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