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 5th February:
The week’s highest day-ahead prices were for delivery on Monday 5th February, when wind output was at a relatively low level. From then, day-ahead prices showed a steady drop in value across the week, as wind generation grew stronger. Prices for delivery on Thursday were the exception to the overall decline, picking up alongside predictions of higher wind generation towards the end of the day – away from the peak demand periods. Another contributor to Thursday’s rise in day-ahead prices was a short shutdown at the Forties Pipeline System, pushing National Balancing Point (NBP) prices higher as worries increased over a supply crunch. Meanwhile, the return of the 600MW Torness nuclear plant put nuclear capacity back to over 80%, increasing supply margins. Prices reached their lowest level on Sunday, 11th February: just £46.93/MWh for baseload delivery, when wind output reached its peak for the week.
Single imbalance prices over the week averaged £49.27/MWh, reaching a peak of £180/MWh on 10th February in settlement period 36 (17:30-18:00). During this time, National Grid paid Dinorwig pumped storage hydro £180/MWh to generate and ease system shortness (when supply isn’t matching expected demand). There were no periods of negative pricing this week; the minimum imbalance price of £0.00/MWh occurred during settlement period 29 (14:00-14:30) on 11th February. Once again, National Grid called on Dinorwig and paid the plant not to generate, as the system was long (an over-supply) due to high levels of wind generation.
The UK experienced progressively windier conditions last week, with output peaking at 12.5GW during the afternoon of 11th February – when wind constituted over 32% of the country’s fuel mix. Wind output was at its lowest on 6th February, with just 2.5GW on the system. 6GW of solar generation on 7th February helped plug some of the gap left by a drop in wind generation during the middle of the day. However, for the rest of the week, solar generation was below 4GW – even at its peak. Last week experienced the same uncharacteristic conditions as other weeks this winter, where wind generation was relatively high despite cold temperatures.
Secure and Promote* (Season +1, +2, +3, +4) baseload contracts were relatively unchanged over the week, losing just £0.06/MWh. The Winter-18 contract lost the most value, closing c.£0.20/MWh down on where it began trading on Monday 5th February. NBP gas contracts were the primary driver for electricity price movements, with some help from other commodities weakening. This included weakness across coal markets internationally, perpetuated by supply concerns due to the threat of strike action in Colombia’s largest mine – averted only by a last-minute agreement. Weak demand for coal in Europe compared to previous winters is contributing to the decline in coal prices over the last few weeks. Brent crude oil also experienced losses last week, dropping to $64 a barrel after concerns over high US output and playing their part in the weakening of coal prices via transportation costs.
*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, check out our blogs.
For a more in-depth analysis from our Flex & Portfolio Management team, speak to us directly on 01473 707755 quoting reference HP250.
Making new connections easier and more cost-effective
In the past businesses have found it hard to get a new connection. At Haven Power, we simplify the process by having our dedicated new connections team.
23 Feb 2018 | Company
International Construction Design and Management – Case Study
ICDM's relationship with Haven Power stems from good price, the simplicity of their new connections process and their commitment to renewable energy.
23 Feb 2018 | Company
Utilities Procurement Group – Case Study
UPG has been engaging with Haven Power since 2011 because of its favourable price, high level of on-going support and simple new connections process.
23 Feb 2018 | Company