20 Jun 2023
Shaniyaa Holness-Mckenzie

Firm Frequency Response: prices take a dip in July

National Grid ESO has published the results of the latest monthly Firm Frequency Response tender - for delivery in July 2023.

This article gives you everything you need to know about the latest results.

What are the headlines?

  • 📉 FFR reference price for July 2023 dropped 11% to £5.85/MW/hr. The median bid price was £7.21/MW/hr.
  • 📊 Contracted volumes remained at 250 MW. The median contract size jumped to 9 MW, up from 5.5 MW last month.
  • ⏳ Expected retirement of monthly Firm Frequency Response: 3 months.

Over 2 GW bidded in for EFA block 3

  • There was an average 1,957 MW bid across the six EFA blocks - lower than last month’s 2,001 MW.
  • This completely filled the 250 MW requirement for the service in every block.
  • This also means rejected volumes came down from last month’s all-time high to an average of 1,707 MW.

Average accepted bids are 64% higher than in June

  • The median bid volume from all bids for July delivery was 20 MW, compared to 19 MW last month. This suggests that some smaller bidders in the market dropped out.
  • The median volume of accepted bids was 9 MW - 64% greater than last month's median bid volume (5.5 MW).
  • This is most evident in EFA blocks 1 and 2, where the median jumped from 4 MW to 9 MW.

The highest prices were awarded in EFAs 5 and 6

So, how did accepted prices differ by EFA block?

  • The reference price for this month’s Tender Round was £5.82/MW/h - 11% lower than June 2023’s delivery reference price of £6.59/MW/hour.
  • The highest-priced contract was awarded in EFA blocks 5 and 6. Zenobe’s 9 MW bid was the highest, accepted at £8/MW/hour.
  • The median price across all bids in this month’s auction was £7.21/MW/hour. In last month’s auction, the median price across all bids was £9/MW/hour. This suggests bidders have lowered their revenue expectations for July.

A 9 MW bid got the highest price - breaking a recent trend

Operators of units with volumes of 1 MW bid in at the highest prices again this month. In the past few months, the highest value contract has gone to these 1 MW bids.

But this month the highest price contract this month was awarded to Zenobe at £8/MW/hour for 9 MW.

This year, average FFR prices have halved

The low FFR prices in the last three months mean that prices in 2023 are now averaging half of those in 2022. But prices remain similar to those observed in 2020 and 2021.

Habitat, Zenobe, and VEST got the highest prices

So, who got the highest prices this time around?

Highest accepted dynamic FFR bid price (£/MW/h) per EFA block group for July 2023 delivery. Note this considers only bids made for weekdays (excl. weekends/bank holidays).
  • DSF stands for Demand-Side Flexibility - and is understood to include behind-the-meter battery storage.
  • Zenobe secured the highest value Firm Frequency Response contract - at £8/MW/hour for 9 MW. They also secured the highest price for a 24-hour contract at £6.29/MW/hour, for 20 MW.
  • Larger volumes are leading again as the average volume for the highest-priced awarded contracts in this month’s tender round was 20 MW per EFA block. In last month’s auction, the average was 14 MW.
  • This is most evident in EFA blocks 1-4 where Habitat’s 16-hour, 35 MW bid at £6.44/MW/hour was the highest achieved price for those blocks.
  • VEST Energy broke this trend in EFA blocks 3 and 4 with their 2 MW bid matching Habitat’s £6.44/MW/hour.

Cycling rates for frequency response are increasing

With the increase in renewables on the grid, frequency has been more volatile than ever in 2023. To find out more about how this has changed the energy delivery of systems providing frequency response including FFR, click the link here.

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