This week’s issue of Current± Price Watch – powered by Enact – looks at the significant drop in imbalance prices due to cheap renewable energy, the substantial support for solar, nuclear and offshore wind shown by G7 ministers and proof of the benefits of consumer energy flexibility.
Day Ahead: G7 Ministers show substantial support for renewables
Day ahead prices fluctuated throughout last week experiencing a low of £27.2/MWh on Tuesday 11 April and a high of £30/MWh towards the end of the week on Saturday 16 April.
Last week, the G7 Ministers’ meeting on Climate Energy and Environment took place in Sapporo, Japan, and saw the UK, US, Canada, Japan and France collectively work towards stopping the construction of new unabated coal plants, in what the UK Government has called a “G7 first.”
All nations have also pledged to accelerate the rollout of renewables including increasing offshore wind capacity by 150GW and solar photovoltaic capacity to 1TW by 2030.
Additionally, the five nations pledged to leverage “respective resources and capabilities of each country’s civil nuclear power sectors to undermine Russia’s grip on supply chains.”
Electric vehicles (EVs) also received considerable backing from the nations as they pledged to reach 50% electric car and van sales by 2050.
“We must stop being reliant on expensive and imported fossil fuels and focus on smarter energy solutions. The UK is already a world-leader when it comes to renewables, a fact recognised by the investors I have met in the Republic of Korea and Japan this week,” said energy security secretary Grant Shapps.
“In flying the flag for UK PLC, I want to be crystal clear that the expertise we have from having the four biggest wind farms off our shores is available to support countries looking to invest in their supplies – something that will benefit them, create green jobs and opportunities at home and boost energy security around the world.”
Intraday: DFS results show the power of consumer flexibility
Intraday prices experiences a sharp incline in average prices between 10 April (£15.57/MWh) and 12 April (£107.8/MWh) before stabilising for the remainder of the week.
Since the final Demand Flexibility Service (DFS) event on 23 March energy providers have released results on how much energy their customers were able to shift during peak times over winter.
Similar benefits were reported by British Gas which revealed that customers saved a total of 127MWh of energy during the its ‘PeakSave’ trail.
Consumers also benefitted form this schemes through financial invectives to take part in the schemes. For example, Octopus Energy said that a total of £5.3 million was paid to its customers for taking part in the sessions.
Following the success of their separate flexibility trials, the energy companies praised consumer involvement in providing flexibility to the grid.
“Flexibility must form part of the UK’s energy security plan, shielding us from the damaging effects of continued dependence on fossil fuels,” said Mat Moakes, chief commercial officer of OVO Energy.
“This trial has rewarded customers for using energy at greener times and decongesting the grid as a result. We have a responsibility as industry and government to support households with energy efficiency measures, now and in the future.”
Catherine O’Kelly, managing director of British Gas Energy at British Gas added: “The electricity grid is facing increased pressure and smart technology has a key role to play in managing peak demand.
“Over 200,000 customers signed up to the PeakSave trial, providing us with invaluable insights on how we can manage consumption to support a greener grid, while also helping our customers to make significant savings.”
Imbalance: Wind cuts down imbalance prices
Imbalance prices experienced a significant drop to £-128.11/MWh on 10 April before rising to £-28.67/MWh minimum on 11 April and stabilising for the rest of the week.
The significant drop in imbalance price (compared to a £0/MWh minimum on 9 April) was caused by wind being used to balance the network on 10 April.
Typically the cost of energy actions taken to balance the network are connected to gas power stations however, on the 10 April wind was specially used to balance the network, which meant that the cheaper generation cost resulted in a much lower imbalance price.
Wind and solar generation on 10 April also saw a record low carbon intensity at 33g/kW.
Wind continues to bolster the UK energy system, last week, energy think-tank Ember’s Global Electricity Review 2023 showed that the UK recorded a 23% increase in wind capacity last year.
This success is set to continue into 2023 as National Grid ESO confirmed that wind was the second largest energy generator of UK energy in March 2023 at 29%, following gas at 33.7%.
Overall renewables generated almost half of UK electricity last month (47%) showing positive milestones towards a cheaper and greener UK energy system.