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GB balancing mechanism summary – January 2020

Our regular 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 our January 2020 report include:

  • The average short system price for January decreased by 10% to £52.0/MWh, mainly driven by a 12% drop in gas prices in January, whilst the average long price stayed constant at £14.2/MWh
  • 4th January saw a peak short system price of £150/MWh. The lowest system price was observed on 9th January at -£11/MWh. Long prices in general remained low, with 5% below £2/MWh
  • The proportion of hours where the system was long stayed at 44%, continuing the trend of the previous 3 months
  • Accepted offer volume increased by 6.7% to 1094 GWh with gas CHP-CCGT increasing its volume by 71% to 255 GWh, resulting from low gas prices. The volume of accepted bids from wind increased to 438 GWh (34% of total bid volume) due to curtailment
  • Monthly profits for gas recips under our simple trading algorithm stayed flat at £1040/MW. However, trading hours dropped 39%, mainly a result of a drop to 19 imbalance trading hours

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