The Biggest & Best Portal to the Professional Property, Workplace and Built Environment Community

Sunday, 16 June

Wholesale Power - Cannibals Gather For The Easter Feast

Wholesale Power Market

At Easter, as the UK bathed in warm sunshine, the GB wholesale power market experienced a series of notable events - including cannibalisation.

High levels of embedded solar generation reduced the need for grid-connected energy production, causing the minimum daytime demand to drop below the night time minimum twice over the Easter weekend.

Over the course of the weekend, GB also broke its record for consecutive no-coal hours, setting a new record of 90 consecutive no-coal hours, as low demand levels and high renewables output negated the need for the fossil fuel technology.

 

Cannibalisation

The GB market also experienced the phenomenon of wholesale price cannibalisation in action, particularly on Easter Sunday, where wholesale prices underwent notable reductions.

The cannibalisation effect is the depressive impact on wholesale electricity prices caused at times of high output from intermittent, weather-driven forms of generation, such as solar, onshore wind and offshore wind farms - in essence the rule of supply and demand kicks in.

Tim Dixon, Wholesale Team Lead at Cornwall Insight, (which advises on energy procurement) told ThisWeekinFM: “The Easter weekend has given us a glimpse into the future as we move into a world with higher levels of embedded and intermittent sources of generation (although since then the weather has deteriorated as far as the solar market is concerned).

"With a large volume of wind farms set to commission under the Contracts for Difference Scheme, we will see a higher requirement on the system for gas to act flexibly rather than generate baseload. Furthermore, greater penetration of intermittent renewables will lead to more cannibalisation and volatility in wholesale prices.

“A repercussion of these trends is that National Grid will increasingly need to instruct generators to turn down during the day. This could potentially result in negative system prices – a trend which is also becoming more prevalent.

“Flexible energy providers, particularly storage assets, may find some positives from this trend. Increased volatility and more significant price differentials between periods of low and high demand will produce arbitrage opportunities.

“This is something that will be welcomed by storage operators and flexible generation looking for revenues beyond National Grid procured services such as frequency response, STOR and the Balancing Mechanism.”

Cornwall Insight’s long-term power market modelling predicts many of these trends, under specific scenarios.

Picture: At Easter, as the UK bathed in warm sunshine, the wholesale power market went cannibal.

Article written by Brian Shillibeer

Share



Related Articles

April 2019 - Energy Tax To Rise By 65%

The Climate Change Levy and Renewables Obligation could see a 65% rise in energy tax this coming April. ThisWeekinFM has teamed up with UK Energy Management to provide...

 Read Full Article
Renewables And The Microgeneration Plan

Building a micro grid has got easier and cheaper  as the equipment needed has reduced in price and become more available. Here, Jonathan Wilkins of EU Automation,...

 Read Full Article
Healthy Energy At Vitamin Production Facility

Royal DSM, a global vitamin producer, has reduced its CO2 emissions at its production facility in Switzerland by 50,000 tons a year through a new biomass heat and power...

 Read Full Article
Renewables Are The Key To Reversing Climate Change

The International Renewable Energy Agency has found that scaling-up renewable energy combined with electrification could deliver 75% of the emission reductions needed to...

 Read Full Article
8 Disruptive Energy Changes That May Affect You

The supply of business electricity in the UK used to be simple. Your company needed a certain amount of power and an energy provider supplied it. How will a...

 Read Full Article
Ellwood Jets In To Help RAF Blues Go Green

RAF Marham, the home of the UK’s F-35 multi role combat jets, is set to become the first military airbase to be powered by green electricity. Defence Minister...

 Read Full Article
CEMEX Moves To 100% Renewable Electricity

CEMEX, a building materials supplier, working in partnership with energy, services and regeneration group ENGIE, will now be provided with 100% renewable electricity to...

 Read Full Article
Vauxhall Energy Empowers Community

The Vauxhall Energy community energy programme has reached completion with the installation of a solar array to drive renewable energy into the community. Vauxhall...

 Read Full Article
How Does Your City Garden Grow? Tulip To Be Planted Next To Gherkin

A planning application has been submitted to the City of London Corporation for The Tulip, a massive bulbous shaped tower which would be sited next to 30 St Mary Axe,...

 Read Full Article
Renewable Energy Sector - Powered To Supply Government

An ambitious new agreement is set to increase public sector renewable energy sourcing. Powered by the new Dynamic Purchasing System, the agreement is expected to generate...

 Read Full Article