National Grid Electricity System Operator (NG ESO) have published the results of their latest monthly FFR tender, for delivery across August. In this article, we’ll take a look at the following:
- A summary of accepted volumes (and how they stack up against procurement targets).
- Which technologies secured contracts.
- The prices secured in the tender.
- And a look at the most lucrative bids.
FFR Volumes
Figure 1 (below) shows the accepted and rejected dynamic FFR volumes - and procurement targets - June, July and August delivery.
- Procurement levels for August remained constant relative to July, with an average procurement of 325 MW across the day (-1% on July).
- On average, the ESO procured ~8 MW more than its requirement, per EFA block. (Only EFA 5 was under-procured.)
The ESO has revised its volume requirements in EFAs 5 and 6 - from 550 MW (in June), down to 350 MW (in July and August). This wasn’t really anticipated, and these reductions in volume caused a price pinch in July (see figures 3 and 4, below). However, the market adjusted quickly, and prices rebounded in August.
Figure 2 (below) shows August’s contracted volume by technology type.
- Battery energy storage systems (BESS) continue to dominate the technology mix for monthly FFR (88.5% of accepted bid volume).
- The remaining volume was filled by DSR and mixed-fuel-type units.
FFR Prices
Figure 3 (below) shows the range of accepted bid prices and the volume-weighted average accepted bid price, for June - August.
- Average FFR prices have rebounded from July levels, increasing to £18.73/MW/h (an increase of 18%).
- However, they are still 10% down on the record-high £20.92/MW/h revenues we saw in July.
- The recent, high FFR prices have defied the usual, seasonal trend as we move into the summer months, with August prices 76% higher than last year (see figure 4, below).
- Social Energy secured the highest-priced contract for an individual EFA block. The bid was accepted for EFA 6 at a price of £47.21/MW/h for 1 MW (the minimum allowed bid in frequency response services). See table 1 (immediately below) for more details across the rest of the EFA day.
Key takeaways
FFR prices have rebounded from July, and remained high relative to previous years. Procurement volumes in EFAs 5 and 6 are down from June, but remain unchanged from July.
The GB frequency response markets are experiencing significant changes over the coming months. The retirement of the FFR market is one of the major changes - and this lowering of volume requirements could well be part of that transition. National Grid ESO have stated, however, that volume requirements will remain constant until the end of their Dynamic Moderation and Dynamic Regulation “testing phase”.
To stay up to date with the market changes, be sure to keep an eye on Phase by Modo. Remember check in with the Modo Leaderboard to see how battery energy storage revenues evolve (and who comes out on top).