Weekly Energy Report - Day-ahead at lowest level for a year
Stay updated on weekly changes in the energy market with the Haven Power market report. Here’s a summary of the last 7 days, starting Monday 22nd April:
- Day-ahead baseload hit its lowest level for over 12 months.
- Wind and solar contributed 50% of the UK fuel mix on Easter Monday.
- UK power curve displayed mixed movements throughout the week.
- High wind output sent the UK system long.
Read more below:
A supply-led fall pressured the day-ahead price to below £38/MWh for delivery on Wednesday 24th April. Low demand for gas, due to warmer than average temperatures, meant the premium was traded out of the National Balancing Point (NBP) prompt, with its power equivalent feeling the effects. A forecast of increased wind output for the same day further reduced gas demand, adding yet more bearish pressure. The price of £37.92/MWh was the lowest for over 12 months.
Prices for day-ahead baseload power then took a bullish turn towards the weekend, with wind output expected to fall dramatically on Sunday 28th April. This expected reduction led to the price increasing to over £43/MWh, although this is still relatively low. Wind was generating around 2GW over the day, so National Grid needed more output from Combined Cycle Gas Turbines (CCGTs) – although not from coal, which didn’t come online.
Week 17 saw more negative imbalance prices; typically, they coincided with periods of high wind output. The week’s lowest price was -£61/MWh, for settlement period 2 (00:30-01:00) on Saturday 27th April. During this time, the actions National Grid took to reduce generation outweighed those taken to increase it by almost 1200GWh, meaning the system was long. The final price of -£61/MWh was set by National Grid accepting a bid from Unit 1 at Drax power station to reduce output.
The highest price for the week, £100/MWh, was for settlement period 19 (09:00-09:30) on Tuesday 23rd April, when the system required more actions to increase generation output. The final price was set by National Grid accepting offers totalling 75MWh from Ffestiniog pumped storage hydro plant in Wales.
Renewables and other
Renewable output was high again during week 17, with wind generation strong for most of the week.
Solar output was over 9GW on Monday 22nd April, as the UK enjoyed clear skies and warm conditions as the bank holiday weekend came to an end. Wind and solar combined to contribute almost 50% of power generation at their peak, at around 14:00. Low power demand meant that Combined Cycle Gas Turbine (CCGT) output was less too.
Wind output peaked at almost 12GW, on Friday 26th April, at 23:00, when it was contributing over 42% of all power being generated. This reduced emissions from power generation to 110g/KWh.
Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts experienced mixed movements during week 17, but ended the week at almost the same level as where they opened. Stronger trade on the wider energy complex on Tuesday 23rd April offered some support to forward power markets. However, mixed signals from longer-dated gas products meant that any movements lacked obvious direction. Price increases in both European carbon and coal may have been provided an additional upwards push.
During trading on Thursday 25th April, the power curve gained on the previous day, with National Balancing Point (NBP) gas prices finding support from an uptick in Brent Crude futures. This followed news that Russia was curbing its exports.
Prices along the power curve lost value on Friday 26th April, with a weaker wider energy complex not taking any direction from a stronger prompt market.
*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 Winter 19 and Summer 20.
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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