A roundup of all you need to know from the markets most relevant to battery energy storage.
The headlines this week are:
⬆️ Average power prices increase this week as wind generation falls
⚡️Frequency response prices rise again for Dynamic Regulation and Dynamic Containment
💥 FFR remains top of the Market Benchmarks
🔌 Interconnector imports have recovered to levels last seen in early 2022, but with a new trend emerging
Key metrics
- Average day-ahead price: £129 /MWh, +21%
- Average day-ahead spread: £123 /MWh, -12%
- Maximum day-ahead price: £212 /MWh, +12%
- Minimum day-ahead price: £0 /MWh, 0%
Despite the chilly weather over the weekend, power prices fell to zero on two occasions with high wind generation continuing. However, as the lowest prices were concentrated at the weekend power prices increased on average from last week, while the average spread for battery energy storage fell.
The increase in the average day-ahead price comes as a result of higher demand and lower wind generation. As the week progressed, demand increased resulting in a likely Triad on Tuesday 17th January. Wind generation fell across the week, reaching as low as 2.6 GW on Monday 16th January. This was the lowest wind generation of the year so far.
Frequency Response
Key metrics:
- Average dynamic containment low price: £5.81 /MW/hr, +30%
- Average dynamic containment bid volume: 943 MW, -9%
- Average dynamic containment accepted volume: 617 MW, -15%
A few instances of high prices in the Dynamic Containment Low market saw prices increase by 30%, even whilst procured volumes fell. Prices reached a maximum of £33/MW/hr on Monday 16th January.
This trend also applied to Dynamic Regulation High which had an increase in average bid prices, despite an increase in bid volume. Prices reached a high of £40/MW/hr, also on 16th January.
Overall, although there was a decrease in the average bid volumes seen across almost all the frequency response services, the market remains saturated with bid volumes exceeding requirement.
Battery market benchmark revenues
Key metrics:
- Dynamic Containment benchmark: £81k /MW/yr (+23%)
- 1-hour day-ahead trading benchmark: £46k /MW/yr (-9%)
- 2-hour day-ahead trading benchmark: £83k /MW/yr (-11%)
The effects of the changes in market conditions can be seen in the benchmarks for battery energy storage. This sees increases in Dynamic Containment and Dynamic Regulation revenues and a dip in revenues from day-ahead trading this week.
Next week
Key metrics:
- Maximum National Grid ESO Demand Forecast: 44 GW Friday 20th January
- Minimum National Grid ESO Surplus Forecast: -1.5 GW Tuesday 24th January
The dip in temperature is set to continue throughout next week. The combination of cold weather with lower wind generation in the forecast pushes surplus into the negatives. However, it is worth noting that similar conditions on Wednesday and Thursday this week did not result in any significant price increases.
Chart of the week
Interconnector imports have recovered to early 2022 levels as European power prices have reduced, with increases in French nuclear generation playing a significant role.
However, with high wind generation pushing prices down overnight, there have been significant daily swings on the interconnectors. In fact, since 1st January there have been nine days where interconnectors have swung from exporting heavily overnight to importing heavily during the day.
These swings of around 8 GW come as imports recovered to their highest level since early 2022. The biggest swing was seen on Saturday 7th January at 8.9 GW, which is the highest we’ve ever seen.
Policy updates
For those who missed National Grid ESO’s operational forum on Wednesday, a Balancing Programme quarterly update meeting has been scheduled for Thursday 9th Feb in London. Registration is open on National Grid ESO’s website.
The workshop is a follow up to the skip rate event held late last year, so will be focused on what work is being done to deliver their roadmap for improvements in the Balancing Mechanism - definitely of interest for owners and operators of BM-registered battery energy storage assets.