Prices paid to generators to help keep the power system stable reached multiyear highs on Wednesday evening.
National Grid Electricity System Operator (ESO) paid £2,242/MWh cashout prices in the balancing mechanism for power at 6-6.30pm as demand outstripped supply on the back of low wind.
That led to a loss of load probability of 37 per cent. The ESO was taking prices of £1,708MWh half an hour later.
Cashout prices previously topped £1,500/MWh in November 2016 (twice) and May 2017. They hit £3,000/MWh at lunchtime on 30 November 2015.
Had the situation occurred a few days earlier, the system operator would have benefitted from around 2GW of headroom due to the Triad mechanism, which incentivises large energy users to reduce grid draw over winter evenings.
However, Triad runs from November to February and is being scrapped by Ofgem after next winter.
Flexible generators able to access the balancing mechanism would have enjoyed a windfall.
National Grid is working to ensure more sources of flexible power are able to access the balancing mechanism and help keep the power system stable. Its ability to balance intermittent generation is fundamental to enabling net zero while keeping the lights on.
Free demand-side response report
Interested in demand-side response?
Download this free report, with input from National Grid, Elexon, suppliers, aggregators, DNOs, consultants and end users that provide flexibility. It provides views on market challenges, opportunities and the road ahead.
Get the report here.
Related stories:
Balancing mechanism now open to smaller players
Peak pique: Ofgem’s charging changes set to bite
National Grid outlines future of frequency response
Grid chief: Inertia has been “taken for granted, it will become much more important”
Project Terre: What’s it worth?
Terre and BM: Elexon opens market entry process for aggregators
Does load DSR require a separate incentive?
EDF Energy: Flexibility is the key to Net Zero
DSR: Water firms, industrials and SMEs on what is working, what’s not
Charging reform ‘key to unlocking DNO flex’
UKPN: We’ll give flex every change before resorting to reinforcement
National Grid works to open BM to all, prepares for Terre
New control desk ‘doubles small flex’ in BM
Can the Balancing Mechanism offset FFR price erosion?
National Grid outlines plans to bring all flex providers into Balancing Mechanism
Flexitricity aims for supply licence, eyes BM prize
Limejump: Aggregators will need a supply licence to survive
Follow us at @EnergystMedia. For regular bulletins, sign up for the free newsletter.
