May 2019 could well be the month that the UK’s energy transition took hold. It was good news story after good news story, unless, of course, you owned a coal-fired power plant. Or, indeed, were an energy trader hoping for a quiet bank holiday weekend. Over the last bank holiday weekend, an “extraordinary turn of events” saw the UK’s power price turn negative for nine consecutive hours, a new record run for the country’s wholesale market. Demand for power slipped to 2GW below forecasts which, when combined with surging wind generation, saw prices fall to as low as -£71.26/MWh. In total, one 24-hour period saw 11 hrs of negative power pricing, & the average system price for power on Sun 26 May stood at -£12.16/MWh. Put bluntly, if you owned a power station on that day without any guaranteed pricing arrangement, you stood to lose money. Those events only served to underpin power price trends for month in total. Rarely was the wholesale price above £50/MWh and the average price throughout May 2019 stood at £39.47/MWh, according to Drax’s Electric Insights tool. For comparison, May 2018’s average system price was almost exactly £10 more expensive at £49.34/MWh, as was May 2017’s at £49.24/MWh. Negative pricing shouldn’t be seen as a problem in need of a solution, but instead an indication that we aren’t going flexible fast enough.
Current News 3rd June 2019 read more »