Renewables generators are bearing the brunt of power prices depressed by the coronavirus lockdown, analysts suggest.
Cornwall Insight reports settlement prices for solar and wind down as much as 15 per cent below average baseload values during March and April.
For the respective months, captured prices for solar generation were on average 8.4 per cent and 14.9 per cent below average settlement prices for baseload supply. Wind prices undershot baseload benchmarks by 8.2 per cent and 15.5 per cent. For clarity, the analysts averaged prices over five days.
As flexible generation – mainly gas – is withdrawn from covid-depressed markets, renewables are making up a bigger share of trades. But that leaves comparatively inflexible green power exposed to greater market volatility, and thus to bigger losses.
In April alone, UK half-hourly prices for day-ahead supply went negative on eight occasions, a new record, Cornwall reports. Solar posted ‘repeated’ negative prices for next-day supply.
Not all green generators suffer equally, the analysts note. Worst hit are suppliers trading output unprotected by fixed price supply deals or legacy ROC arrangements.
“Some (clean energy) suppliers have been able to lock in fixed price PPAs for 2020 at healthier prices, in excess of £50 per megawatt hour if agreed before November 2019”, said Cornwall. However, baseload prices for settlement for summer 2020 are currently around £26/MWh, or 31 per cent below last year’s levels.
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