Alice Grundy 16/Sep/2020 16:21
The UK’s electricity system price spiked to over £500/MWh last night (15 September) in response to low levels of wind generation.
According to data from Drax Electric Insights prices hit £540.22/MWh at 18:16 on 15 September, remaining between £530/MWh and £540/MWh until prices decreased to £315.49 at 19:16, and then fell back down to £40.50 at 20:16.
This spike was due to a combination of low levels of wind generation and high demand, according to Jean-Peal Harreman, director of energy market data analyst EnAppSys BV.
This was echoed by European power market Nord Pool, which found that the daily average wind power on 13 September in the UK was 8,733MWh/h, falling to 2,507MWh/h on 14 September and “even lower” on 15 September.
However, the high electricity system prices weren’t contained only to the UK.
“The biggest issue was that all of Western Europe had the same problem. This meant that, whereas countries would normally trade across the interconnectors to solve their issues, this was not really an option yesterday,” EnAppSys’ Harreman said.
The high prices were seen across Europe, with EnAppSys stating that prices of over €1,100/MWh (£1,005/MWh) were seen on hourly trading in Belgium and close to €4,000/MWh (£3,655) on quarter hourly trading in Germany.
“This shows again how important it is to look at the European power market as an interconnected and interdependent system. The interconnectors can solve problems, but they also allow the problems of other markets to seep through to neighbours,” Harreman added.
In the UK, a Capacity Market notice was issued at 13:04 for 17:30 that day, meaning there was not sufficient capacity for the usual buffer of 500MW above the forecasted demand and operating margin. These are automatic notices, and yesterday’s was cancelled at 14:05 following response from the market to ensure there was sufficient capacity available.
In March, the electricity system price skyrocketed to £2,242/MWh following lower than expected wind generation during the evening peak in a similar - though more extreme - scenario to this week's price jump, with the increase occurring during settlement period (SP) 37 (6-6:30pm), around the same time as this week's spike.
“The CM warning yesterday alongside volatile pricing in the Day-Ahead, Intraday and Imbalance markets over the last few days highlights the growing need for large-scale deployment of energy storage to meet grid requirements,” Aaron Lally, managing partner of clean tech trading house VEST, said.
“Energy storage and renewables need to be deployed and traded correctly to ensure we have enough electricity on stand-by for when the wind isn't blowing.”
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