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 November report are:
- The average short system price for November decreased to £81.82/MWh, while the average long price rose slightly to £45.81/MWh.
- November Bid and Offer volumes decreased to 696 GWh and 836 GWh respectively, with CCGTs remaining the main contributor at 45% and 75% of total bid and offer volumes as they ramp up for Winter.
- The 2nd (and final) stage of the BM reform (P305) was implemented on 1 Nov 2018. This consisted primarily of a change in VoLL1 (from £3000 to £6000/MWh) and calculation methodology of imbalance prices (from PAR502 to PAR1).
- The implementation of PAR12 pricing brought about greater availability of relatively cheaper system long prices for buyback, pushing up Imbalance Buyback profits significantly to £348/MW, the largest since the Winter spike in March 2018.
- Despite higher marginal costs from increased gas prices, gas recips gross margins increased slightly due to the increase in Day Ahead trading and Imbalance Buyback profits.
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