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Current± Price Watch: Surging wind pushes power prices negative

Image: Current±.

Image: Current±.

Surging wind generation in Britain pushed power prices into negative figures over the last week, again highlighting the transmission challenges in the country.

In the latest in our Current± Price Watch series – powered by LCP Enact – we take a look at the impact of the windy weekend, and the challenge of network constraints.

Day-ahead: Windy weather pushes prices down

Local day ahead prices dropped to just £0.44/MWh on Saturday 11 June, on the back of surging wind generation, while Nordpool day ahead prices fell to -£2.49/MWh on Saturday as renewable generation across Europe also remained strong.

“The end of last week was quite interesting. At their peak we had over 7GW of solar and 15GW of wind, which caused day ahead prices to go briefly negative,” said Rajiv Gogna, partner at LCP and

commercial lead at LCP Enact.

However, network constraints meant a significant amount of wind power ended up being curtailed. On 10 June for example, almost 5GW was curtailed.

It follows recent research from LCP, commissioned by Drax, which showed that wind curtailment due to network constraints cost Britain £507 million in 2021, a record high. This jumped from £299 million in 2020, largely due to the increased cost of gas, with gas fired plants called on to support the system when transmission constraints led to wind generation being switched off.

Intraday: Growing renewables helping to lower prices

Intraday prices also saw the impact of surging wind generation, with APX MID prices dipping to -£20.26/MWh on 11 June.

This was a substantial drop from the previous week’s low of £61.67/MWh, while similarly the maximum price was lower at £ 193.59/MWh compared to £219.26/MWh.

The number of periods of negative or low pricing is set to increase as variable renewable generation such as wind contributes a larger proportion of the grid. This growth is creating additional opportunities in the energy sector, in particular for technologies such as storage.

“Increased penetration of renewable generation is clearly the solution to improving global long-term energy security, but this must go hand in hand with further investment in flexible, economic and easily-deployed energy storage assets that can deliver low-carbon electricity on-demand during periods of volatile renewable generation,” said Jeff Douglass, markets and analytics manager at Invinity Energy Systems.

“As the proportion of renewables and therefore the need for balancing increases, the energy throughput demands of batteries grow too, ensuring that high-throughput energy storage technologies, capable of cycling multiple times per day without degrading, are rapidly becoming an intrinsic part of our energy system. This has given rise to a new asset class of high-throughput, longer-duration energy storage.”

Imbalance: Balancing grid essential amid variable generation

The imbalance price fell to just -£69.49/MWh on 10 June, similarly down from last weeks low of £0/MWh due to surging wind generation.

Moray Offshore Wind Farm set the system imbalance price in period 27 on 10 June at nearly -£70/MWh. The wind farm was fully commission in April 2022, although it first started generation back in June 2021 when the first of its 100 Vestas V164-9.5MW turbines were installed.

It recently drew attention due to its decision to delay taking up its Contracts for Difference (CfD) support, due to high power prices. Moray Offshore Wind Farm secured a CfD contract for 950MW of generation at a set price of £57.50 per MWh in 2017.

Meanwhile, Habitat Energy had a new 39MW plant accepted in the 10th June Dynamic Containment auction, with prices ranging from £2.95/MWh to £96.69/MWh over the asset’s first 3 days.

To find out more about LCP Enact, click here or follow them on Twitter or LinkedIn for the latest market updates.


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