Keep up to date with energy market changes over the last 7 days with the Haven Power market report.
It’s particularly relevant if you’re buying electricity flexibly, or about to sign or renew a fixed electricity contract. Getting these decisions right can reduce your vulnerability to price-peaks in the wholesale market and save you money.
Here’s a summary of the week starting 12th February:
NG also called upon flexible pumped storage hydro to ease system stress.
Day-ahead prices for week 7 showed more fluctuations than in recent weeks. Prices ranged between a low of £47.77/MWh for delivery on Tuesday, 13th February and a high of £49.67/MWh for baseload delivery on Monday, 12th February.
The forecasts of stronger wind for Tuesday helped cause the low, although the price was still higher than on the previous Friday. The fact that prices for Wednesday were up despite higher wind forecasts may be due to some weather models indicating a cold spell at the end of the month and the beginning of March. This could have pushed up the National Balancing Point (NBP) front month, and fed the day-ahead price.
The continuing volatility saw prices retreating again on Thursday, with strong winds forecast for the morning. Baseload delivery for Friday 16th was up once again, with lower wind forecast for that afternoon, although a reduced demand forecast may have muted this increase to some degree. Day-ahead prices were up again for delivery over the weekend, as low wind output was predicted. This is set to continue for the majority of next week.
Single imbalance prices during week 7 averaged £48.85/MWh: slightly lower than in the previous week. Prices reached a maximum of £115/MWh during settlement period 19 (09:00-09:30) on 13th February. During this period, National Grid deemed the UK system to be undersupplied and paid Ffestiniog pumped storage hydro £115/MWh to generate and restore balance. There were no periods of negative pricing during week 7; the minimum imbalance price of £22.80/MWh occurred during settlement period 42 (20:30-21:00) on 16th February. During this period, National Grid paid a number of renewable generators to either stop generating, or curtail their generation, to reduce the oversupply level.
The UK experienced windy conditions again during week 7, with wind reducing towards the end of the week – just in time for a nice weekend. Wind output peaked at 13.3GW during the afternoon of 14th February – when wind constituted over 28% of the UK fuel mix. Wind generation was at its lowest (just 1.74GW) on 18th February as the UK experienced relatively still conditions. Nearly 6.5GW of solar generation on Friday 16th February again plugged some of the gap left by a fall in wind generation during the middle of the day. As the UK moves out of the winter season, and with days lengthening, solar output will increase as the weeks go by.
Secure and Promote* (Season +1, +2, +3, +4) baseload contracts gained on average £0.45/MWh as the UK wholesale market experienced generally bullish conditions. The front 2 seasons (Summer18 and Winter18) saw the largest increases of over £0.50/MWh from Monday’s opening to Friday’s close. Stronger fuels bolstered prices at the beginning of the week, with the European benchmark coal increasing, and Brent Crude oil showing strength too. Contracts lost some value in the middle of the week, tracking the UK NBP market. Losses in the other major commodities, European coal and Brent Crude oil also pushed the value down. The losses on the NBP curve were driven by milder weather and lower demand on the prompt; weakness that fed through to the front month, and then onto seasonal contracts. Contracts lost some value in the middle of the week, tracking the UK NBP market, helped further by losses by the other major commodities, European coal and Brent Crude oil.
*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 18 and Winter 18.
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 Andrew Jarman, Haven Power’s Portfolio Analysts. To speak to them, or the rest of our Flex & Portfolio Management team’s analysts, get in touch on 01473 707755 quoting reference HP250.
Haven Power shortlisted as energy supplier of the year for the third year running
Leading Ipswich based business electricity supplier Haven Power has been shortlisted for supplier of the year at the prestigious Energy Awards 2018.
19 Sep 2018 | Company
Carbon causes price crash, while renewables rise to 40%
Renewables rose to almost 40% of generation last week, while falling carbon prices led to a price crash. Stay updated with our new weekly market report:
19 Sep 2018 | Industry
7 ways to get financial support for sustainability
Is your business lacking the financial support to implement sustainable change? Here’s 7 schemes that could help:
13 Sep 2018 | Industry