UK power balancing costs hit record high in November on stronger winds

UK power system balancing costs hit record levels in November as stronger winds led to high constraint costs amid a gas crisis, data from the National Grid Electricity System Operator showed Dec. 16.

Monthly balancing costs of GBP541.2 million ($718.8 million) in November outstripped the previous record (set in October) by GBP226 million – a month-on-month increase of 72%.

"Increased wind levels caused constraint costs to rise due to increased congestion in the system," National Grid ESO said.

Continued high balancing mechanism prices, mirroring higher prices in the power market, meant the costs of these actions were significantly higher, it said.

This was most notable across the Scottish-English transmission bottleneck, with Scottish constraint costs alone hitting GBP271.5 million in November – up 313% month on month.

UK balancing costs were forecast to remain at unprecedented levels through to the end of Q1 2022.

After a "dip" to GBP276.6 million in December, the monthly costs were due to average GBP330 million/month in Q1 2022, up 103% on Q1 2021.

S&P Global Platts assessed the price of UK day-ahead peak power at GBP525.15/MWh Dec. 16, up 78% from the start of the month, and 376% from the start of the year.