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GB monthly wholesale, balancing & asset value report – February 2021

We are pleased to present our GB monthly wholesale, balancing & asset value report for February 2021.
Key highlights from the report include:

  • Wholesale and Balancing prices dipped relative to January 2021 towards levels consistent with previous years. Baseload prices decreased by 26% (to £53 /MWh), while average short and long prices decreased by 31% (to £76.7 /MWh) and 23% (to £26.8 /MWh) respectively. Price peaks in February have also decreased to £725 /MWh in the balancing market and £335 /MWh in the wholesale market, relative to £4,000/MWh and £1,065 /MWh respectively in January.
  • As temperatures increased, average demand in February fell by 5.6% (or 46.5 GWh) relative to January. Coupled with an increase in onshore wind generation of 29%, CCGT and nuclear generation saw a decrease in generation of 37% and 27% respectively.
  • The market saw increased periods of oversupply with Net Imbalance Volume ratios changing to 52% short and 48% long (relative to 57% short and 43% long in January 2021). Total accepted bid and offer volumes increased by 66% and 62% respectively, with CCGTs accounting for 76% of accepted offer volume. Onshore wind accounted for 40% of accepted bid volumes (compared to 7% in January 2021) which resulted in lower system prices.
  • Arenko’s Bloxwich battery was able to access the low charging prices in the Balancing Mechanism in February while participating in Dynamic Containment (DC) service as a result of recently introduced service stacking1 by National Grid. Though the total bid volumes were small due to low throughput requirements in DC, Bloxwich captured negative charging prices at an average of -£1.1 /MWh with a positive total gross margins of £0.01 k/MW/month.
  • Due to the price decrease in both the wholesale and balancing markets, both the 1hr/2hr duration batteries saw significant decreases in their margins relative to the January spike. The total monthly margins decreased by 50% to £4.8 k/MW for the 1hr duration battery and by 50% to £6.3 k/MW for the 2hr duration battery. However, the total margins for February were still higher than the monthly 2020 average.
  • Reciprocating engines also saw a significant 85% decrease in their monthly margins (from £14.4 k/MW in January 2021 to £2.1 k/MW in February 2021) as wholesale captured prices decreased by 50.2% relative to January 2021 (by almost £100 /MWh). Running hours were also down by 43% compared to January 2021.

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