U.K. Utilities Get Huge 4,000 Quid/MWh Windfall as Low-Wind Winter Demand Means Fossil Fuels Win: Hartree (2)

  • Utility EDF was paid more in 3 days than in all of Q3 by National Grid to balance the system, energy trader Hartree says in emailed market insight covering January.
  • National Grid forced to buy power at £4,000/MWh, some 70 times greater than the average price paid over 2020
  • EPH achieved the highest average sales price for any day in the Balancing Mechanism of over £3,600/MWh
Hartree Solutions

A perfect storm of peak winter demand, low wind generation and delays to supplies from the continent saw record prices for UK power last month, Hartree Solutions says.

European Union carbon permits have jumped to a record near 40 euros; some U.K. utilities are reportedly using EU permits to hedge risks because ICE hasn’t started offering UK carbon futures yet: analyst at bank

“Generators were quick to cash in on this tightness with National Grid forced to pay EDF nine times more than the previous year for their flexibility in January, averaging sales1 of £473/MWh compared to £53/MWh. Meanwhile, EPH and Drax settled for £387/MWh and £303/MWh.”

Hartree said it was coal-focussed utility group EPH that on Jan. 13 “achieved the highest average sales price1 for any day in the Balancing Mechanism2 (BM) of over £3,600/MWh during the second week of tightness. However, we can observe that EDF was quickest to react to the supply scarcity, achieving the highest average sales prices1 in the BM for the three initial tight days. On the last of these, the EDF owned West Burton B recorded the highest ever price paid in the BM contributed to an average sales price1 of over £3,200 /MWh that day.

NOTE: 1 Volume Weighted Average

See this for all the cool charts in Hartree’s report: https://www.hartreesolutions.com/2021/02/10/edf-leads-generators-in-winter-windfall/?utm_campaign=Market%20Insights&utm_medium=email&_hsmi=110427261&_hsenc=p2ANqtz-_nBCpsaPzmkIL7Kk0i_LvP-kV9jE_JQ1WTaCe9rsd2Ur3XlMrSSUdA0CZoUlJaKVCmdwuf_agYPjToB46f3N-gtZaDCQ&utm_content=110427261&utm_source=hs_email

(Updates with Chart; then another; adds link; adds carbon)

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