The deficit in the NBP gas system, combined with exceptionally cold weather continue to send judders through the UK day-ahead power market for the second consecutive day Thursday, hitting its highest level seen since November 2016.
Day-ahead base and peak at GBP98/MWh, GBP105/MWh
EPEX, N2EX settles higher than OTC
System Buy Price at GBP439/MWh mark, highest seen this winter
Gas-fired generation is one of the most dominant fuels in the UK generation mix.
National Grid issued gas deficit warning on Thursday at 6am London time as demand was set to significantly outstrip supply due to a number of outages.
Gas-fired output remained nearly 1 GW above the coal-fired generation at 12.2 GW between 10:30-11am London time.
Coal-fired generation was at 11.2 GW. The installed capacity of the coal-fired plants in the UK is more than 12 GW.
In the over-the-counter market, UK baseload prices traded GBP98/MWh at before 11am market on close, which was GBP35/MWh jump seen in the last two days. This was the highest seen since November 7, 2016, when baseload contract was at GBP150/MWh.
The peakload counterpart closed at GBP105/MWh at 11am -- the highest since November 8, 2016 when it stood at GBP134.35/MWh.
"The market is not panicking. There is a gas short that will need to be covered either by increasing supply or decreasing demand. So we are trying to find a price at which that will happen. Power is dictated by that because gas is a fuel," a trader said.
In the underlying NBP gas market, within-day was at 225 pence/therm -- a spike of 105 p/th day on day, and the day-ahead was at 140 pence/therm, a jump of 24 p/th since Wednesday.
Even the System Buy Price hit the highest seen this winter at GBP439/MWh for 11 am London time, this was the highest seen since April 4, 2017, when the SBP hit a maximum of GBP1,509.80/MWh, as per National Grid data.
The SSP and system buy prices are calculated and published on National Grid's website.
These imbalance prices are used for the settlement of energy imbalances incurred by participants due to differences between volumes of energy a participant contracts for, and volumes actually generated or consumed.
The EPEX and N2EX spot auctions settled day-ahead base higher than OTC at GBP104.44/MWh. Peakload counterpart was also nearly GBP24 above the OTC peak at GBP128.38/MWh.
The overnights settled at GBP71.86/MWh, Block 5 was at GBP148.97/MWh, Block 6 was at GBP97.80/MWh and extended peaks were at GBP120.74/MWh, as per EPEX and N2EX spot auctions.
The UK hourly prices between 6-7am London time hit a maximum of Eur208.83/MWh mark for Friday versus French Eur90.42/MWh, as per EPEX and N2EX.
The 2 GW French-UK (IFA) interconnector was seen exporting 2 GW to the UK at 12 pm.
According to the UK Met office, there could be "disruptive snow" and weather could be "bitterly cold" and "windy".
"Blustery snow showers will continue in the north, especially the northeast with drifting. In the south snow will turn heavier and more persistent, with gales and blizzard conditions, leading to drifting. It will be exceptionally cold for all," UK Met office said.
The Met office outlook from Saturday to Monday showed weather was expected to stay cold with snow showers in the north throughout.
"Turning less cold in the south through the weekend with further wintry showers, increasingly over hills. Windy at times for all," it said.
