Weekly Energy Report: Generator outages cause power cuts
For your update on what’s happened in the energy market over the past week, get Haven Power’s market report. Here’s our summary for the past 7 days, starting Monday 5th August:
- On Friday 9th August, gas and wind generator outages cause power cuts across the UK, reducing generation capacity by around 2GW.
- Increased wind generation and high gas supplies triggers fall in Day-ahead prices.
- Energy price variations result in small average losses on curve contracts.
- Solar generation marginally drops below recent weekly averages.
Read more below:
With rising wind output, the day-ahead price for UK power on Monday 5th August was down. Rising nuclear output also helped put pressure on this price, as Sizewell B Unit 1 reactor returned to the system.
Prompt prices for Tuesday 6th August fell further as wind rose above Monday’s levels. A falling National Balancing Point (NBP) prompt, caused by an oversupplied gas network, also pressured prices. Day-on-day losses on prompt prices continued into Wednesday 7th August as wind output remained robust and NBP prompt prices continued to fall.
On Thursday 8th August, wind output dropped significantly, causing a tightening of the market and an increase in the day-ahead price. A firm NBP day-ahead price also helped boost prompt power prices . Prices for Friday 9th August decreased after wind generation rebounded rapidly overnight; from 1.2GW at 15:00 on Thursday afternoon to 13GW at 8:00 on Friday morning. Falling demand heading into the weekend also impacted the decline in the day-ahead price.
In week 32 the highest system price was £80/MWh; occurring during period 43 (21:00-21:30) on Sunday 11th August. The price was set by accepted offers from Green Frog Power’s portfolio of quick response, gas-fired power stations. There were also accepted offers, at the same price, from Lochay power station, a hydroelectric unit located near Killin in Scotland.
On Friday 9th August, between settlement periods 34-37 (16:00-18:30), there were two unplanned generator outages, causing power cuts across the UK. This, in turn, raised the system price to £64.5/MWh. The Combined Cycle Gas Turbines (CCGT) Little Barford power station was the first to trip, removing 670MW of power from the grid. Minutes later, the 1.2GW capacity Hornsea 1 offshore windfarm also experienced an unplanned outage. Together, these outages triggered automatic power cuts specifically designed to protect the integrity of the UK’s power grid.
The lowest system price of £4.00/MWh occurred during three periods over week 32: periods 11 and 12 (05:00-6:00) on Wednesday 7th August, and period 46 (22:30-23:00) on Saturday 10th August. This price was set by accepted bids, from an unknown counterparty, to decrease generation, or increase their power consumption.
Renewables and other
Following the late upward trend from week 31, wind generation continued to climb on Monday 5th August, reaching 7.35GW in the early evening. Solar also started the week with a peak of 6.3GW on Monday 5th August.
Wind output stayed strong over Tuesday 6th and Wednesday 7th August, with generation remaining at between 6GW and 8GW. This then dropped on Wednesday evening. Solar also remained consistent, peaking between 5.25GW and 5.85GW between Tuesday 6th and Thursday 8th August.
Wind generation then dropped to a weekly low of 1.2GW on the afternoon of Thursday 8th August. However, on the morning of Friday 9th August it then rose sharply again to a weekly high of 13GW, remaining above, approximately, 9.5GW for most of the weekend. Solar output peaks were lower over the weekend, with the lowest weekly peak (4.35GW) occurring on Sunday 11th August.
The weekly solar average for week 32 was 1.78GW, slightly below the 1.81GW average seen in week 31. In contrast, the weekly wind average almost doubled week-on-week, rising from 3.41GW to 7.66GW.
Secure and promote* (Seasons +1, +2, +3, +4) baseload contracts fell by an average £0.08/MWh over week 32.
Seasonal contract prices moved down on Monday 5th and Tuesday 6th August due to falling NBP, and European Emission Allowances (EUA) carbon and coal prices. This appears to be influenced by falling global equity prices.
UK power curve prices were largely unchanged on Wednesday 7th August. This was due to varied price movements in the energy complex. NBP gas prices remained relatively firm. However, the bullish effect of this on power prices was offset by weaker carbon and coal prices.
On Thursday 8th August, there was mixed movement in these products. Bullishness in EUA Dec19 carbon prices provided some support for winter 19 power, helping it to make gains on the day. Unchanged coal prices and slightly weaker NBP curve values resulted in the other secure and promote maturities overturning any small losses or gains.
On Friday 9th August, average prices for secure and promote contracts made losses, following the bearishness seen on NBP equivalent contracts and EUA carbon.
*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 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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