In this week’s edition of Current± Price Watch – powered by Enact – we take a look at the use of National Grid ESO’s Demand Flexibility Service (DFS) and contingency coal units, as well as how interconnectors were key to managing a fault on the electricity network.
Day Ahead: Final few DFS test events underway
Despite the raft of actions taken by National Grid ESO over the last week, prices across all three key metrics tracked by Current± Price Watch remained fairly steady.
Day Ahead prices saw a high of £260.4/MWh on 23 January and a low of £30/MWh today over the last week.
With February fast approaching and temperatures staying low, the ESO has run a number of enhanced measures over the past week, including a test this morning where the operator looked to procure 250MW per half an hour between 9:00 and 10:00.
Another DFS test is set for tomorrow and will be the 11th of the service – it would be the 12th had one planned for 24 January gone ahead, but given changing capacity the ESO took the decision to run a second live event on the day – and will see the operator look to procure 100MW per half an hour from 17:30 to 18:30.
Broadly the tests have been seen as a success, with utilities able to procure large amounts of flexibility and pass on the benefits to customers amid the challenging winter.
“We’re pleased to already see rewarding results from our customers’ efforts in making small but significant changes to the way they consume energy,” said George Penman, director of energy propositions at OVO.
“We know that winter is going to be a challenging time for many, so relieving that pressure where we can, and supporting our customers has never been more important. We must continue to pioneer innovative flexibility schemes, rewarding both people and the planet.”
In addition to the test events – the final few ahead of the trial period coming to an end in March – last week saw the first live DFS event on 23 January. This ran from 17:00 to 18:00, with 323MW required over the first half an hour period and 336MW required over the second.
Following this, it ran a live event on 24 January between 16:30 and 18:00, with 274MW required for the first half an hour, 330MW for the second and 341MW for the final half an hour.
Intraday: Coal units once again warmed
APX Mid prices saw a high of £239.69/MWh on 25 January, and a low of £0/MWh on 26 January last week. Beyond the use of DFS, last week also saw the contingency coal units once again warmed.
“In support of mutual cooperation between Great Britain and its neighbouring electricity networks the ESO answered France’s request for additional GB generation to be able to provide assistance today if required by warming the contingency coal units,” said an ESO spokesperson on Thursday 26 January.
“The ESO was able to take this action to support the French network in avoiding consumer disconnections, as the GB network is currently operating as normal and this action would not have placed GB consumers at risk. Following further assessment of network margins in both countries the ESO has now stood down these coal units.”
The three units which began the warming process were DRAXX-5 with an estimated capacity of 570MW, DRAXX-6 with an estimated capacity of 570MW and WBUPS-2 with an estimated capacity of 400MW.
This is the third time National Grid ESO has begun the process of warming its contingency coal units this winter, but is yet to actually use the additional capacity. The operator previously warmed the units ahead of expected tight margins on 23 January and 12 December – both of which periods saw Britain experiencing particularly cold weather.
When the coal contracts were first signed up operator in the summer of 2022, many were predicting exceptionally tight conditions throughout the winter threatening not just high prices but system stability.
This winter has proved less challenging than expected in many ways thanks both to mind weather and high wind generation, reducing the demand for gas. Going forwards increasing amounts of generation will be needed on the system, as can be seen be seen from the increased parameters for February’s T-4 auction.
Imbalance: Britain leans on interconnectors following fault
Imbalance prices reached a high of £310/MWh on 26 January and a low of £0/MWh on 29 January.
While Britain moved to support France on Thursday, it relied on interconnectors on Wednesday following a fault on the transmission grid.
“The news that the UK was forced to ask for emergency assistance from Europe to keep the lights on in southeast England on Wednesday, due to a circuit fault in the southern electricity transmission network, underlines the importance of network digitalisation,” said Eduardo Fernandez, head of Gas, Power, and Water at NTT DATA UK&I.
“What we need is a smarter and more resilient energy network, which digitalisation can help to achieve. This will ultimately lead to increased security, predictive maintenance, and improved flexibility in services. By building layers of redundancy and reducing errors through automation of operations and processes, we can contribute to vital energy security. Another benefit of automating operations is that we can make them more sustainable and help networks to meet net zero targets sooner, by cutting unnecessary emissions and wastage.
“With distribution system operators and transmission system operators already looking for ways to build efficiencies into their operations through digitalisation, the use of IoT and analytics will create smarter transmission and distribution networks – turning data from physical assets into actionable insight and helping to prevent us from becoming dependent on other nations for energy.”