Bumpy Markets Ahead as UK Renewables Grow: Cornwall
Great Britain's wholesale power market experienced a series of price shocks over the Easter weekend, said Cornwall Insight April 30, as once rare events came thick and fast.
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 period. Over the course of the weekend, GB also set a new record of 90 consecutive no-coal hours, as low demand levels and high renewables output were enough.
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The GB market also experienced the phenomenon of wholesale price collapse in action, particularly on Easter Sunday. Cornwall Insight's long-term power market modelling predicts many of these trends, under specific scenarios, will become more frequent in future, as more renewable generation comes online.
“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. 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," it said.
“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," it said.
The power market in Northern Ireland is separate from the GB market, although both are in the UK.