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

We are pleased to present our GB monthly wholesale, balancing & asset value report for March.

Key highlights include:

  • Wholesale and Balancing prices increased slightly compared to February 2021 due to an increase in demand and carbon prices. Carbon prices increased by 4% compared to February to a monthly average of £53.2/tonne. Baseload prices increased by 2% to £54/MWh. Average short prices also increased by 4% to £79.8/MWh, whereas the average long prices remained constant.
  • Total demand increased in March compared to February by 4% due to the lifting of the latest national lockdown restrictions. Total wind generation decreased by 33% to 5.1 TWh compared to February which was replaced by an increase in CCGT generation by 31% to 7.2 TWh. As a result, total carbon emissions in March increased by 14% to 4.2 MtCO2e compared to February due to increased thermal generation.
  • Due to volatile wind generation throughout the month, there was a large spread between top and bottom prices in the Balancing Mechanism. There were six periods of system prices above £300/MWh due to low wind generation, coupled with increased demand as a result of cold snaps from 3rd March – 7th March, whereas during periods of high wind generation, the system price fell as low as -£61/MWh. Compared to February, total accepted bid and offer volumes decreased by 20% and 21% respectively.
  • Similar to last month, Arenko’s Bloxwich battery was able to access the low charging prices in the Balancing Mechanism while participating in Dynamic Containment (DC) service as a result of recently introduced service stacking by National Grid. On 3rd March, it also withdrew from the DC auction to trade in the Balancing Mechanism and capture high offer prices above £100/MWh during periods of low wind generation.
  • Due to the price increase in both the wholesale and balancing markets, both 1h/2h duration batteries saw an increase in gross margins compared to February. The total monthly gross margins increased by 23% to £5.9k/MW for the 1h duration battery and by 20% to £7.6k/MW for the 2h duration battery compared to February.
  • Reciprocating engines also saw an 80% increase in their monthly gross margins (from £2.1k/MW in February 2021 to £3.8k/MW in March 2021) mainly as a result of a 25% increase in wholesale captured prices.
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