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UK power system prices go negative Sunday as wind booms, demand weakens

London (Platts)--15 Jan 2018 242 pm EST/1942 GMT


Higher wind generation and lower demand drove UK power system prices into negative territory over the weekend, according to traders and National Grid data.

The daily minimum system sell price was minus GBP68.43/MWh at 07:30am London time Sunday, according to National Grid. Minimum SSP prices were negative in four consecutive settlement periods Sunday morning, it said.

The SSP and system buy prices are calculated and published on National Grid's website.

These imbalance prices are used for the settlement of energy imbalances incurred by participants due to differences between volumes of energy a participant contracts for, and volumes actually generated or consumed.

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"Short answer for the negative system prices on Sunday was the wind as [National] Grid has to pay wind [farms] to turn off," a trader said.

The trader cited strong wind as well as imports from the Continent as factors driving the negative prices, adding that demand was below seasonal norms.

A second trader said system prices were negative "between 13 to 16 half hourly settlement periods. I can imagine that the must run was too high to absorb the additional wind. Too high, as in not flexible enough."

According to National Grid data, demand for peak times Sunday had been forecast at 44.60 GW, while actual demand outturned at 43.7 GW.

Between 07:00 am and 08:00 am London time Sunday, gas-fired generation was 16.2 GW, coal-fired output was 348 MW, nuclear output was 7.2 GW and wind infeed was 6.4 GW, National Grid data showed.

Wind output had been forecast at less than 6 GW Sunday morning, but wind outturn surpassed 6.3 GW between 07:00 am and 08:00 am London time, according to National Grid, which meant weaker system prices.

--Shubhlakshmi Shukla, shubhlakshmi.shukla@spglobal.com
--Edited by Jonathan Fox, jonathan.fox@spglobal.com




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