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BM prices skyrocket to £1,000/MWh as cold weather and low wind bites

Image: Getty.

Image: Getty.

Prices in the Balancing Mechanism hit £1,000/MWh last night (03 December) with two CCGT offers accepted at the price.

Seabank CCGT had its offer of 244MW accepted at £1,000/MWh, as did 7.7MW from Keadby CCGT during SP23, both of which are owned by SSE.

The system tightness that resulted in the need for these offers to be accepted was largely due to the colder temperatures and “varying renewable generation levels” alongside higher demand, according to National Grid ESO on Twitter.

When asked for more detail by Current±, a spokesperson for National Grid ESO pointed to its Twitter, which adds that it is “monitoring closely as we head into the weekend”.

Last night saw “the highest power demand of this winter so far” as well as "below seasonal normal wind generation", according to Limejump’s head of business development Genna Boyle, who explained to Current± that this, coupled with there only being 1.9GW of coal available to run, as well as Intergen's Spalding CCGT tripping at around 15:00 before coming back online at around 18:00, combined to create a “real system tightness”.

This led to National Grid ESO releasing a Capacity Market notice for 16:00, which was promptly cancelled.

National Grid ESO then called upon Seabank and Keadby by accepting offers at £1000/MWh for just over a settlement period. Once the peak demand had passed, it didn’t accept any further extension on the offers of £1,000/MWh.

This combination of the weather being very cold with very low wind, as well as the low coal availability, is set to continue to impact on next week, which Boyle said is “looking really tight”. Coal is expected to continue to have a low availability, with forecasts placing it at just over 3GW on Monday and 4GW by the middle of next week.

“One of the factors that may drive more volatility into next week will be whether those plants actually return as planned, or whether they're delayed or they come back early,” Boyle said.


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