On 18th May 2021, National Grid Electricity System Operator (NG ESO) published the results of their latest monthly FFR tender, for delivery across June. In this article, we’ll take a look at the following as we move into the delivery month:
- A summary of accepted volumes and how they stack up against procurement targets.
- Which technologies secured contracts.
- The prices secured in the tender (including a look at who secured the most lucrative bids).
Volumes
Figure 1 (below) shows the procured and rejected dynamic FFR volumes, in addition to the ESO’s procurement targets for May and June delivery.
- Dynamic FFR procurement levels for June remained constant relative to May, with an average procurement of 392 MW across the day (-1% on May).
- EFA blocks 1-4 were fully satisfied with slight over procurement, with both EFA 5 and 6 seeing a slight under procurement - 19 MW and 8 MW respectively.
Figure 2 (below) shows February’s contracted volume by technology type.
- Battery energy storage systems (BESS) continue to dominate the technology mix for dynamic FFR (~90% of accepted bid volume), following BESS migration back into the service in November 2021 - more info here.
- The remaining dynamic FFR volume was filled by DSR and mixed-fuel-type units.
Prices
Figure 3 (below) shows the range of accepted bid prices compared to the volume-weighted average accepted bid price, for both May and June delivery.
- Average FFR prices have continued to rise from March levels, increasing to £20.92/MW/h (+17% on May). This represents a new all-time high avg. price over the last two years.
- Record-high FFR prices have defied the usual, seasonal trend as we move into the summer months, with June prices +168% higher than the previous year. This is most likely driven by opportunity costs in other markets, e.g. wholesale, Dynamic Containment, Regulation and Moderation (see figure 4, below).
- Statkraft secured the highest-priced contract for an individual EFA block on behalf of Statera’s Creyke Beck site. The bid was accepted over blocks 5 and 6 at a price of £39.90/MW/h for 44 MW. See table 1 (below) for more details across the rest of the EFA day.
Key takeaways
FFR prices have reached a new all-time high over recent years, rising 18% from the previous month, with an average contract value of almost £21/MW/h. This represents a continued trend of high prices since winter 2021/2022, with June prices up +168% year on year. Procurement volumes have remained largely unchanged across the EFA day, with service requirements static from last month.
The GB frequency response markets are experiencing significant changes over the coming months, with the retirement of FFR, the conclusion of EFR contracts, and the introduction of new services. To stay up to date with the market changes, be sure to keep an eye on Phase by Modo and check in with the Modo Leaderboard to see how BESS revenues evolve (and who comes out on top).