Our flexibility market summary provides a concise monthly review of recent events in key markets for flexible technologies. The initial focus is on the balancing mechanism and firm frequency response (FFR) markets with more ancillary services markets to be added over time.
Highlights from December include:
- The average long system price decreased 41.5% to £14.2/MWh whilst the average short system price decreased only 4.4% to £57.7/MWh. This was mainly driven by a 15.7% drop in gas prices in December
- 9th December saw a peak system price of £160/MWh for the month.
- The lowest system price of -£88/MWh occurred on 8th December in a period where 13 hours of continuous negative prices were observed due to record-breaking wind generation combined with low overnight demand. This was the longest recorded period of negative imbalance prices in GB
- Over 90% of bid volume between 21:00 on 7th December and 14:30 on 8th December was either negatively priced or priced at zero; though 90% of the negatively priced volume was taken to relieve system constraints – i.e. the majority was Scottish onshore wind being curtailed due to limited transmission network capacity
- Day ahead wholesale prices also went negative for the first time in GB on the same weekend and fell as low as -€12.8/MWh on the continent
- The proportion of hours where the system was long was 44%, the lowest value of 2019
- Accepted offer and bid volumes increased by 61.9% and 26.2% to 1263 GWh and 1081 GWh respectively. CCGTs made up 81% of the total accepted offer volumes but the volume of accepted bids from wind increased significantly to 256.5 GWh (24% of total bid volume) due to curtailment
- Monthly profits for gas recips under our simple trading algorithm dropped 11.3% to £1025/MW, primarily due to a 56.3% fall in day ahead profits. Trading hours and number of starts decreased to 78 hours and 48 respectively
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