Power prices in Britain have remained stable over the last week, although the ESO has still used its new service to reduce demand. In this week’s Current± Price Watch – powered by Enact – we take a look at the use of the DFS, as well as the energy mix and the warming of coal units.
Day Ahead: Stable prices as wind generation makes up largest percentage of mix
Day Ahead prices for the last week hit a high of £210/MWh today, and a low of £ 30/MWh last Monday 30 January.
Prices have remained fairly stable over the past week, supported by the strong levels of wind generation, which made up the largest part of the energy mix every day last week.
Strong wind generation has been a key factor for the relative stability of power prices over the winter, despite concern throughout 2022 as the energy crisis continued.
Already we’ve seen record breaking levels of generation over the first month of 2023, a record likely to be continually broken as the offshore wind sector in particular grows at pace.
Recent analysis via RenewableUK’s EnergyPulse for example, found that a total of just over 3.5GW of new wind capacity had been installed in 2022.
“The latest figures show we made terrific progress in installing a record amount of new offshore wind capacity last year,” said RenewableUK’s chief executive Dan McGrail.
“However, we still need to ensure that the glacial pace of the consenting process is stepped up significantly to stay on track for the quadrupling of offshore capacity that the government wants to see by 2030 as a key step in strengthening the UK’s energy security.”
Intraday: Coal units again warmed but margins remain secure
APX Mid intraday prices hit a high of £207.9/MWh for last week on 30 January, and a low of £42.09/MWh yesterday (5 February).
While again this showed the relative stability of the power market currently, there has been concern around tight margins this coming week, leading National Grid ESO to issue a notice for two of its contingency coal contract units to warm.
“The ESO has issued a notification to warm a second of our five winter contingency coal units for potential use on Tuesday 7 February,” said an ESO spokesperson yesterday (5 February).
“This notification is not confirmation that the units will be used on Tuesday, but that they will be available to the ESO, if required. The ESO as a prudent system operator has developed these tools for additional contingency to operate the network as normal. This does not mean electricity supplies are at risk.”
This is the fourth time the ESO has warmed units this winter, but it is yet to actually use them. As with the previous periods, the operator has subsequently cancelled the use of Ratcliffe-on-Soar Power Station and West Burton.
Imbalance: Prices fall into minus figures
Over the past week, imbalance prices have dipped below last week’s low of £0/MWh to fall into minus figure over two days, hitting a low of £-18.15/MWh on 2 February.
Prices hit a high of £250/MWh on 5 February, again a fall from last week boosted by the strong wind generation.
Despite the relative stability of the system overall, the ESO once again ran Demand Flexibility Service (DFS) test events, as the end of the trial period looms. The test ran on 31 January between 17:30 and 18:00 and 30 January between 09:00 and 10:00, marking the 10th and 11th tests.
Overall the service has been seen as a success, helping to balance the grid and bringing additional benefits for consumers. The ESO had considered running a further test tomorrow (7 February), but given the comfortable margins has decided against this action.
Case study: OVO customers awarded over £23,000 over live events
Energy supplier OVO joined DFS back in November, offering its customers a minimum of £1 for every kWh shifted below their personal target during the service events.
According to the company, its been a success with their customers, with George Penman, director of energy propositions, OVO commenting:
“We’re pleased to already see rewarding results from our customers’ efforts in making small but significant changes to the way they consume energy. 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.”
Over the first live event on Monday 23 January, OVO saw 7,989 customers taking part with a total of 2,834kWh energy shifted. This led to customers receiving £8,500 in total, with the highest earning participant making £22.41 in credit for one hour of energy shifted.
During the second live test on Tuesday 24 January, 9,698 customers took part, collectively shifting 4,800kWh of energy.
Customers were rewarded with £14,180 in total, with the highest earning participant making £31.47 in credit for the 90 minutes of energy shifted.
In addition, 1.27 tonnes of carbon has been saved by OVO customers since the trial commenced.