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GB wholesale, balancing & asset value report – May 2021

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

Key highlights include:

  • Wholesale prices increased in May compared to last month as carbon and gas prices continued to rise. The UK-ETS debuted on 19th May with allowances trading between £45– 50 /tCO2, which was ~ 10% higher than EU-ETS between 19th May – 31st May 2021. Higher carbon and gas prices drove thermal generation down in May by 15% as renewable output increased, leading to a 10% reduction in emissions compared to April.
  • Average short system prices decreased by 3% compared to April as demand decreased by 1%. May system price peaked at £160.8 /MWh, with nine settlement periods where prices were above £150 /MWh.
  • Average and bottom long system prices both increased in May as CCGTs provided most of the downward balancing instead of wind.
  • Daily STOR auctions started from 1st April following the new tender format to comply with the European Clean Energy Package. Accepted availability prices have averaged ~£2.86 /MW/h with utilisation prices in the BM ranging from £0 – £220 /MWh for the month of May.
  • Three of the sample gas recips trading in the BM saw their offer revenues increase in May, even with the higher carbon and gas prices, as some sites may benefit from the UK ETS exemption muting the impact of increasing carbon prices.
  • As average daily spreads in the BM decreased by -34% in May compared to April, both 1hr and 2hr batteries saw a decrease in margins.

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