Easter weekend – a glimpse into the future for wholesale power?

In what has previously been a rare occurrence on the GB transmission system, the minimum daytime demand dropped below night time minimum demand twice in succession over the Easter weekend, as high levels of embedded solar generation reduced the need for grid connected energy production.

In this blog we look at the notable trends observed in the wholesale market over the Easter weekend – trends that could become the new norm as the energy system undergoes rapid change.

High levels of intermittent generation

The bank holiday weekend brought with it the timely arrival of spring, with sunny weather experienced across the UK. This saw solar output peak on Easter Sunday at 8.7GW out of a total of 13.1GW of operational capacity. While this fell short of the all-time solar generation record, which stands at 9.3GW in May 2018, it contributed significantly to the generation mix.

In addition to the high levels of solar output, GB experienced wind output pick up towards the end of the weekend, and in particular a rise on Easter Sunday afternoon. Wind output on the Sunday peaked at 5.1GW at 17:30.

High levels of solar output, combined with rising wind generation, pushed coal completely off the system – coal represented 0% of the transmission system electricity mix over the four-day weekend – while gas-fired output had to act flexibly to manage varying levels of intermittent generation.

Graph showing solar wind and CCGT output over the Easter Weekend

Daytime minimum demand falling below night time minimum

Daytime demand fell below night time minimum demand on two separate days over the Easter weekend. In period 28 (1.30pm – 2.00pm) on Friday 19 April, daytime minimum demand dropped to 22.0GW, 715MW lower than the night time minimum demand of 22.8GW in period 10 (4.30am – 5.00am). Although period 28 was the only period where daytime demand fell below the night time minimum, period 30 on the same day (2.30pm – 3.00pm) saw transmission system demand just 2MW higher than the night time minimum.

On Easter Sunday (21 April), day time demand fell below the night time minimum in seven consecutive settlement periods. This occurred between period 27 (starting at 1.00pm) and period 33 (ending at 4.30pm). On the day, the night time minimum demand was 21.0GW in period 7 (3.00am – 3.30am), whilst the minimum day time demand was 1.2GW lower at 19.8GW in period 31 (3.00pm – 3.30pm).

Graph showing Great Britain daytime demand falling below night time demand, 19 April and 21 April

No-coal record broken

Over the Easter weekend, GB also broke its record for consecutive no-coal hours. Between 11:00pm on 18 April 2019 and 5:30pm on 22 April 2019, no coal contributed to GB’s power supply mix, setting a new record of 90 consecutive no-coal hours. This surpasses the previous record of 76 no-coal hours set between 9:00am on 21 April 2018 and 1:00pm on 24 April 2018.

To date (22 April), there have been 829.5 no-coal hours in 2019, nearly three times as many coal-free hours as the same time last year (280 no-coal hours), and nine-and-a-half times as many as the same time in 2017 (88 no-coal hours).

Power price cannibalisation in action

Price cannibalisation is the depressive influence on the wholesale electricity price at times of high output from intermittent, weather driven generation such as solar and on- and offshore wind. Over the weekend we saw price cannibalisation in action, particularly on Easter Sunday.

A graph showing no-coal hours in 2019 versus previous years

On Sunday 21 April, the Half Hourly Market Index Price was lower from period 23 (starting at 11.00am) to period 37 (ending at 6.30pm) than the minimum night time price, which was £34.5/MWh. During the day, the price dropped as low as £25.6/MWh in periods 31 and 32, caused by high levels of solar output combined with rising levels of wind generation.

The Single Imbalance Price on the Balancing Mechanism also fell to its lowest level of the day in periods 31 and 32 at £15.0/MWh, with numerous combines cycle gas turbines (CCGT’s) reducing their output in line with the decreased demand.

A sign of things to come

The trends observed over the weekend are perhaps a sign of things to come as we move into a world with greater levels of embedded and intermittent sources of generation. It is likely that many of these trends will be exacerbated as more wind farms commission under the Contracts for Difference scheme, requiring gas to act more flexibly but causing greater cannibalisation and volatility in wholesale power prices. This is something Cornwall Insight’s long-term power market modelling has certainly observed.

A graph showing APX market index price and imbalance prices on Easter Sunday

Another notable repercussion includes an increasing need for National Grid to instruct generators to turn down during the day, potentially resulting in negative system prices – a trend which is also becoming more prevalent.

Flexible energy providers, particularly storage assets, may find some positives from this trend. Increased volatility and greater price differentials between periods of low and high demand will produce arbitrage opportunities, something that will be welcomed by storage operators and flexible generation looking for revenues beyond National Grid procured services such as frequency response, STOR and the Balancing Mechanism.

Cornwall Insight is hosting its Wholesale Market Summer Outlook webinar on 9 May at 2pm. Please sign up to our webinar here, and we look forward to seeing you online.

Cornwall Insight is excited to announce the launch of its Benchmark Power Curve. Our quarterly report providing scenario-based 20-year forecasts of captured power prices for a range of technologies including onshore wind, solar PV, offshore wind and gas generation. For more information, download our Service Specification here or get in contact with Ben Hall at b.hall@cornwall-insight.com or 01603 542102 

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