National Grid Electricity System Operator (NG ESO) has published the results of their latest monthly FFR tender, for delivery across October. In this article, we’ll take a look at the following:
- A summary of accepted volumes (and how they stack up against procurement targets);
- The prices secured in the tender; and
- And a look at the most lucrative bids.
FFR Volumes
Figure 1 (below) shows the accepted and rejected dynamic FFR volumes in addition to procurement targets for September and October delivery.
- Procurement levels for October remained constant relative to September, with an average procurement of 331 MW across the day (+2% change on September).
- On average, the ESO procured ~15 MW more than its requirement, per EFA block, with no under-procurement in any blocks.
- Continuing the trend from last month, rejected volumes increased again since the previous tender round, growing 5% to ~690 MW. This is likely driven by a falling requirement in Dynamic Containment as we move out of the summer months, with providers looking to secure monthly contracts and avoid saturated day-ahead response markets.
FFR Prices
Figure 2 (below) shows the range of accepted bid prices and the volume-weighted average accepted bid price, for September - October.
- Despite the continuing trend of oversupply in FFR and no increases to volume requirements, October prices remained steady on last month with an average price of £21.54/MW/h (-1% on September).
- EFAs 5-6 cleared at ~1.7x the value of EFAs 1-2, with high-value acceptances across the overnight blocks.
- October pricing represents the second highest average price in FFR over the last two years, with prices up 98% on the same time last year (see figure 3 below).
Top bids
Table 1 (below) shows the highest accepted FFR bids in each EFA block for October delivery.
- Social Energy (again) secured the highest-priced contract for an individual EFA block - a 1 MW bid, accepted across EFA blocks 5 and 6 at a price of £37.27/MW/h.
- Across EFA blocks 1-4, Gresham House-owned and Arenko-operated site Nevendon secured the highest value contract, at a price of £25.67 for 7 MW.
Things to watch
October saw FFR prices stay at their lofty heights, with the second highest average price observed in FFR in the last 2 years. Accepted volumes remained constant on last month with rejections rising higher still - most likely caused by falling DC requirements and a desire to offset the risk of lower prices in a saturated day-ahead response market.
As we move into the shoulder months with a tough winter ahead, wholesale market opportunity is set to increase dramatically, which could force prices higher still by the end of the year.
With significant changes to the GB frequency response markets and December baseload power trading above £500/MWh, this winter is set to be a challenging but lucrative time for BESS. To stay up to date with the market changes, be sure to keep an eye on Phase by Modo, check in with the Modo Leaderboard to see who comes out on top and get in touch to discuss our brand new forecasting product Signal to see our view on this winter and beyond!