News / Energy Market Report - Renewable generation is strong again

Energy Market Report - Renewable generation is strong again

12th March 2019

For your update on weekly changes in the energy market, read the Haven Power market report. Here’s what happened over the last 7 days, starting Monday 4th March:

  • This was a strong week for renewable generation.
  • Wind and solar combined to satisfy over 50% of UK demand on Sunday 10th March.
  • There were conflicting signals across the curve on various fuels.
  • Lowest 2019 levels reached for single day and weekly average for Day-ahead baseload power prices.

Prompt/Day-ahead Power

During week 10, Day-ahead baseload power prices averaged £46.28/MWh - the lowest weekly average so far in 2019.

Tuesday 5th March saw the highest price for the week, at £48.49/MWh. The National Grid forecast suggested that low-cost wind generation would drop throughout the day and go below 5GW in the evening. This, when compared with the 10.5GW peak wind output from the day before (Monday 4th March) helped to set the price.

Saturday 9th March saw the week’s lowest price for Day-ahead baseload power, at £40.96/MWh - also this year’s lowest price for a single day. It was due to very high levels of cheap, weather-dependant generation reducing the system’s reliance upon more expensive gas to less than 7GW between 09:30 and 15:30.

2019-03-11 pricingreportgraphs1

Imbalance Prices

Settlement period 15 (07:00 – 07:30) on Friday 8th March had the highest imbalance price during week 10. At around 7.6°, temperatures were lower than they’d been on previous days. With wind and solar levels low, National Grid had to increase gas and pumped storage hydro generation to meet the usual demand increase as the working day began. By accepting offers from Dinorwig power station (pumped storage hydro) and Killingholme power station (natural gas) to increase generation, the systems operator set the final price of £135/MWh.

Settlement periods 28 (13:30 – 14:00) and 29 (14:00 – 14:30) on Sunday 10th March shared the week’s lowest imbalance price of £10/MWh. In contrast to conditions when the highest price occurred, wind and solar levels were strong during Sunday afternoon. This meant that National Grid had the cheaper option of reducing gas generation to balance the system. This forced gas down to just 6.3GW (17.5% of the generation mix) during settlement period 29.

2019-03-11 pricingreportgraphs3

Renewables and other

Week 10 saw the strength of renewable generation in the UK returning, with wind and solar both playing their part.

While reaching above 4GW for four of the seven days, solar peaked at 5.5GW on Saturday 9th March when it was generating 15.3% of the UK’s supply. Wind performed even more strongly, reaching over 10GW every day except Tuesday 5th March. When peaking at 14.3GW on Sunday 10th March, it was contributing 39.5% of the generation mix.

Taken together, these weather-dependant sources of generation peaked at 19.6GW on Sunday 10th March; they were generating enough electricity to supply 53.7% of the UK’s demand at the time.

2019-03-11 pricingreportgraphs4

Seasonal Contracts

Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts lost on average £0.14/MWh over week 10, amid conflicting signals across the fuels complex.

The week started on a bullish note, with the European carbon market closing higher on Monday 4th March at €22.92/tCO2e than on the previous Friday at €22.05/tCO2e. In addition, firmer trades on the Brent Crude Oil market offered extra upward impetus. The front month benchmark gained $0.75/bbl (barrel) on Friday’s closing price. However, this momentum reversed on Tuesday 5th March with the front month baseload contract losing £0.20/MWh after gaining £0.288/MWh the day before. Wednesday 6th March followed much the same trend, with sharp losses recorded on the Brent Crude Oil futures.

There were conflicting signals on Thursday 7th and Friday 8th March, with some fuels trading weaker and others stronger. On the first of these two days, European carbon and coal values gathered strength while the National Balancing Point (NBP) gas curve shed value. On the second day, the December ’19 contract on the European carbon markets traded above Thursday’s settlement value, while the NBP gas curve, European coal forwards, and Brent Crude Oil futures all softened.

2019-03-11 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 Summer 19 and Winter 19.

2019-03-11 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.


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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