Wind generation has gotten off to a stellar start in 2023, with record high generation helping to keep power prices stable amidst the energy crisis. In this week’s Current± Price Watch – powered by Enact – we take a look at wind generation records, import records and one of the last Triad warnings.
Day Ahead: Wind generation continues record-breaking run
Day Ahead prices hit a high of £226.3/MWh last week on 15 January, and a low of £0/MWh on both 13 and 15 January.
The steady prices follow the low prices seen last week and over the Christmas period thanks to low demand due to mild weather and high renewable generation.
Indeed, the wind generation record was once again smashed last week, with the technology generating over 21.62GW on 10 January.
This broke the previous record, set less than two weeks before on 30 December 2022 when wind generated 20.918GW. This in turn overtook the two preceding records of 19.936GW on 26 October and 20.896GW on 2 November.
“The fact that the UK’s onshore and offshore wind farms keep setting new electricity generation records shows just how important this technology has become in our modern energy system. Wind power is playing a central role in keeping UK homes and businesses powered up at the coldest time of the year,” said RenewableUK’s CEO Dan McGrail earlier this month.
“Wind is now the UK’s cheapest source of new power, so every unit of electricity we generate from it helps consumers by reducing ultra-expensive gas imports. Investing in more wind and other renewables is vital in tackling the cost of living crisis for hard-pressed bill payers.”
While it’s fair to say the energy market overall has proved more stable in recent weeks than the sector has feared over the last year, it will take time for the benefits of this to filter down to consumers.
Intraday: Imports rebound to boost energy security
Intraday prices were similarly steady over the past week, with APX Mid prices hitting a high of £236.3/MWh on 15 January and a low of £-12.99/MWh on 10 January.
A further factor helping to steady power prices is increased export availability, as continental Europe also benefits from lower-than-expected demand. In France, increased nuclear capacity has bolstered the energy system, although there is continued concern as EDF last week announced that two reactors will be delayed in coming back online.
The Chooz-1 unit will now come online on 28 February – a month later than previously announced – and the Blayais-1 unit will come back online on 11 February – ten days later than announced. These delays pushed up power prices in France, with Bloomberg stating that prices for next month rose by as much as 3.9% in response to the news.
However, the stronger import capacity has bolstered energy security in Britain. Over 2022, the country was – for the first time – a net exporter of capacity for Q2 and Q3, as it benefited from strong LNG pipelines and renewable generation.
But this looks set to revert, with Britain actually breaking its import record a single day on 2 January when it imported 130GWh, or 19% of generation.
Imbalance: One of the final Triad warnings issued as businesses eye new opportunities
Imbalance prices hit a high of £280/MWh last week on 15 January, and a low of £-73.09/MWh on both 12 and 14 January, continuing the trend of negative prices.
The slight drop in weather did drive up prices minorly, leading National Grid ESO to issue one of the last Triad warnings, with the system set to come to an end in February 2023.
“Last week’s cold snap drove high electricity demand, causing one of the last Triad warnings that British businesses will receive before the scheme’s conclusion at the end of February. Combined with continuing energy price rises, many businesses will view the loss of Triads as another hit to their bottom line,” explained Barry Hurst, head of sales for Enel X UK & Ireland.
“However, this should encourage businesses to explore other energy market opportunities that can provide stronger returns. For example, National Grid’s new Demand Flexibility Service (DFS) will provide an additional source of revenue to participants as well as the Capacity Market. Any business with the ability to turn down or switch one MW of energy demand across their sites can earn revenue. If they meet the criteria for participation in DFS, they are also likely to qualify for the Capacity Market.”
The relative stability in recent weeks has led to a quiet period with regards to DFS tests, after a flurry in early December during a period of particularly cold weather. However, National Grid ESO has now issued the details for its eighth test tomorrow (17 January) at 17:30.
“Arguably, the real challenge for many organisations is not the loss of Triad-related savings, but rather in navigating the complexity of Great Britain’s energy markets to ensure that their energy assets are in the right market at the right time,” finished Hurst.
“This requires expertise that is often not core to a business’s competencies and is being highlighted during the prolonged period of energy market volatility that British homes and businesses have been enduring.”
To find out more about LCP Delta’s Enact platform, click here or follow them on Twitter or LinkedIn for the latest market updates.
