Pricing
21 Feb 2022
Alex Done

Monthly FFR - March ‘22 auction results

National Grid Electricity System Operator (NG ESO) recently published the results of the monthly FFR tender, for delivery across March. In this article, we’ll take a look at:

  • A summary of accepted volumes and how they stack up against procurement targets;
  • Which technologies secured contracts; and
  • 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 February and March delivery.

Figure 1 - Accepted, rejected and targeted monthly dynamic FFR volumes for tender rounds 145 (February delivery) and 146 (March delivery). Rejected volumes exclude bids rejected under rejection code 4 (i.e. bids where multiple tenders were received for the same unit).
  • Dynamic FFR procurement levels for March rose slightly relative to February with an average procurement of 404 MW across the day (+8% on February).
  • Unlike February, EFA 5 and 6 requirements were fully satisfied, with slight over procurement in EFA 3.

Figure 2 (below) shows February’s contracted volume by technology type.

Figure 2 - Accepted dynamic FFR volumes for tender round 146 (March delivery), split by technology type.
  • Battery energy storage systems (BESS) continue to dominate the technology mix for dynamic FFR (~95% of accepted bid volume), following BESS migration back into the service in November 2021 - more info here.
  • Neither mixed-fuel-type units nor hydro secured dynamic FFR contracts for March delivery.

Prices

Figure 3 (below) shows the range of accepted bid prices compared to the volume-weighted average accepted bid price, for both February and March delivery.

Figure 3 - Reference price (volume-weighted average accepted bid price) and price range for dynamic FFR, in 145 (February delivery) and 146 (March delivery).
  • Average FFR prices fell from last month to £15.42/MW/h (-25% on February), its lowest level since November 2021.
  • Habitat secured the highest-priced contract for an individual EFA block on behalf of the 5 MW Wolverhampton site owned by Gresham House. The bid, accepted at £31.12/MW/h for both EFA 5 and 6, was 38% lower than February’s highest-priced contract. See table 1 (below) for more details across the rest of the EFA day.
Table 1 - Highest accepted dynamic FFR bid price (£/MW/h) per EFA block for March delivery. Note this considers only bids made for weekdays (excl. bank holidays).

Key takeaways

Average March FFR prices have fallen from the ~£20/MW/h observed across December-February, with the most lucrative accepted contract value (for an individual EFA block) falling by as much as 38%. With FFR helping to buoy the revenue stack for storage since November 2021, falling prices will likely have a substantial effect on March 2022 BESS revenues.

Procurement volumes have remained largely unchanged from the previous month, with a marginal increase across the evening EFA blocks (5+6). However, volumes are expected to decrease from April onwards, with the introduction of Dynamic Regulation and Dynamic Moderation (expected 8 April and 6 May respectively).

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).