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Home/GB Balancing Mechanism Summary – June 2019

GB Balancing Mechanism Summary – June 2019

Aurora’s Flexibility Market Summary provide a concise monthly review of recent events in key markets for flexible technologies. The initial focus is on the balancing mechanism and firm frequency response (FFR) markets with more ancillary services markets to be added over time.

Key highlights from the June report are:

  1. The average short system price for June dropped marginally to £58.0/MWh, whilst the average long price dropped 4.3% to £24.7/MWh as wholesale prices remained low at £39.3/MWh due to falling gas prices continuing to offset increasing carbon prices.
  2. The system price was set at £375/MWh for 3 consecutive settlement periods from 11am – 12:30pm on 24th June, set by Uniper’s Ratcliffe coal plant and caused by low renewable output combined with higher than expected demand and ongoing nuclear outages and interconnector limitations.
  3. The proportion of hours where the system was long was 49%, the lowest since December 2017.
  4. Bid and offer acceptance volumes in June increased by 34.3% to 775 GWh and 9.7% to 575 GWh respectively, relative to May, with CCGTs contributing 53% and 80% of the total bid and offer volumes.
  5. Monthly profit for gas recips increased 88% to £2321/MW, caused by reduced marginal costs and increased top percentile prices. Trading hours and number of starts both increased by 40% to 127 hours and 63 respectively.

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