UK system operator National Grid issues electricity margin warning

London — UK electricity system operator National Grid issued an electricity margin notice at 2011 GMT Nov. 3 calling for generating capacity to be made available for the afternoon of Nov. 4.

Electricity margin notices are used to send a signal to the market of looming tightness in supply. They highlight that, in the short term, the National Grid needs a greater safety cushion between power demand and available supply.

"From 1630 hours to 1830 hours on Wednesday [Nov. 4] there is a reduced system margin," the ESO said, forecasting a system margin shortfall of 740 MW, excluding any availability of demand-side response.

"Maximum Generation Service may be instructed," it said. This allows generators to offer capacity outside an asset's normal operating range in emergency circumstances.

Externally interconnected system operators, meanwhile, were requested to notify National Grid of any additional capacity available.

The notice "does not signal that blackouts are imminent or that there is not enough generation to meet current demand," the system operator said.

A high pressure weather system over the UK has brought much colder, calmer conditions, increasing power demand while decreasing generation from wind.

UK wind generation had fallen from over 8 GW Nov. 3 to 5.2 GW in the morning of Nov. 4, Elexon data showed. Gas-fired CCGT generation at over 18 GW was up over 4 GW day on day.

Imports of power were at full capacity on the 2 GW IFA1 subsea interconnector to France, but were at zero on both the BritNed and NEMO links to the Netherlands and Belgium.

UK day-ahead hourly prices Nov. 3 spiked to GBP132/MWh ($171/MWh) for delivery 1800-1900 hours Nov. 4, Entso-e data showed. The following hour cleared at GBP99.91/MWh.

"The wind forecast has evolved slightly and now show that tomorrow [Nov. 5] will be the absolute low in wind generation this week, extending the tightness across both today and tomorrow," said trader Hartree Solutions.

Demand on the morning of Nov. 4 was running 1.5 GW-2 GW higher day on day "so we would expect the demand forecasts to increase further for this evening peak," it said.

"As a result, margins will be low for the next 48 hours and the market will have to react quickly to any unplanned outages to balance the system giving the potential for high prices," it added.