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Chart of the Week

2019

Is energy on Santa’s Negative list? New trends for GB power markets

Nick Palmer Senior Writer

In this week’s Chart of the Week we take a look at a first for the GB market, negative day-ahead trading prices, and analyse how this trend could develop in the future. On 9 December, the UK experienced a negative day-ahead trading price for the first time, with prices for 03:00AM to 04:00AM UTC delivery on the hourly day-ahead auction dropping to -£2.84/MWh.   The cause was record levels of wind generation. Across the weekend of 7 and 8 December, wind generation in GB was exceptionally high, with a peak of 16.2GW recorded on 8 December. As a proportion of demand, wind generation averaged 38.3% over 8 December, reaching a peak of 41.6%. High wind output carried over into the early hours of Monday 9 December and, when combined with low demand levels, saw outturn day-ahead hourly prices between 3:00AM and 4:00AM UTC reach -£2.84/MWh. This followed the trend already seen for intraday trading that weekend, with 27 settlement periods showing negative pricing. The lowest negative prices were seen for imbalance prices, which dropped to a low of -£88.00/MWh and stayed negative for 23 consecutive periods across 7 and 8 December. The incident also highlighted the increasingly interconnected nature of coupled European markets, with negative pricing also observed throughout German, Dutch and Belgian day-ahead power prices. German prices reached a low of -€16.09/MWh between 2:00AM to 3:00AM UTC. At the time of negative day-ahead delivery prices, the UK was receiving 1.1GW of power through NEMO and BritNed, whilst at the same time ...

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