Lockdown easings and closures of nuclear plants pushed day-ahead electricity prices 15% higher year on year in the three months to 30 June, data released today by analysts EnAppSys shows.
Average day ahead prices peaked at an unprecedented £72/MWh, says the firm today. Imbalance costs – aka ‘system price’ – of £74.85/MWh were the highest since at least 2011, the year EnAppSys started collecting values.
Doing nothing to remove heat from GB power trades were a chilly spring with largely wind-free skies, a trip-out at Anglo-French interconnector IFA, and BritNed’s unplanned outage between 9 March and 7 June.
All contributed to record carbon prices when the new UK trading market opened in mid-May. For a period, UK carbon rights were dearer than traded on the EU’s ETS.
Overcast skies pushed green generation 25% lower than quarter 1’s output, EnAppSys report. Gas contributed 41.2% to UK electricity mix in quarter two. Renewables supplied 32.3%, nuclear spun out 16.4%, and imports contributed 9.3%.
Coal’s long retreat continued, blipping to a negligible 0.8%. Whitehall has brought forward by 12 months the hydrocarbon source’s cessation, now due to complete from October 2024. Drax’s turbines nos. 5 and 6 are now closed for commercial generation, but remain on call to support the Capacity Market.
Nuclear’s fall off every spring has recurred now since 2017. Reductions in the latest quarter were down to Sizewell B1 and B2, Hunterston Generator 8 and Heysham 2-7 all being offline for varying durations.
EnAppSys director Paul Verrill commented: “The periods of tight system supply resulting from recovering demand, combined with less renewables and less available margin from thermal generation and interconnectors, resulted in periods of extreme prices.
“With higher carbon prices increasing the overall market price, the overall average market price that ultimately feeds into what consumers pay increased significantly in the quarter.
“System prices peaked at £1,971.59/MWh in mid-April when spinning reserve became as tight as 1.3GW. The combination of several factors led to this tight period and high prices, most notably the trip of IFA2, lower renewable generation than forecast and the fact that BritNed was already offline.”
“The tight system in the most recent quarter meant that imports were required more than they had been in Q2 last year.
Imports contributed 6.09TWh over the quarter, up from 4.59TWh a year earlier, Verrill noted. They made up 9.3% of all generation in the quarter, up from to 7.9% in Q2 last year.
Sustained upward pressure in wholesale trades look set to oblige Ofgem to lift caps imminently on suppliers’ regulated retail tariffs. Anti-poverty campaigners fear as many as 400,00 additional users could be pushed into fuel poverty this winter.
More details at swww.enappsys.com