The windy weather pushed power prices down below zero last week, hitting a low of -£61/MWh according to EnAppSys.
On Thursday (11 March) night prices dipped to the low level, continuing the trend of increasing periods of negative prices in the UK. For example, in 2019 there were 133 occurrences of negative imbalance pricing events according to Cornwall Insight.
This continued into 2020, with 80 hours of negative pricing in the first nine months, three to four times higher than between 2015 and 2018. It dropped to a low of -£38.80/MWh, recorded on 23 May 2020 at 15:30, EnAppSys found.
Last week prices dropped to almost double that level, with Phil Hewitt director of EnAppSys explaining that these negative prices were created due to stability reasons and power export limitations.
“Usually, National Grid keeps inertia at 120-125GVA but last Thursday it fell below these levels, so wind generation needed to be constrained. As a result, wind generators were paid to not generate. Usually, the system pricing algorithm does not include these prices but one of the Drax Biomass units was turned down due to the excess generation on the system and this resulted in negative bid prices.
“It was also not possible to export to continental Europe at this time. Most adjacent markets to GB were also experiencing high renewable generation and, in some cases, negative prices so there was no incentive to change the interconnector dispatch.”
Despite the general growth in periods of negative pricing, the beginning of 2021 has been more marked by record highs, with the imbalance price hitting £4,000/MWh in January. This has been driven by a much colder winter than the previous year, keeping wind generation low and demand high, as well as some extra strain on the system due to Brexit.