UK prompt power prices posted strong day-on-day gains Tuesday, rising for the second consecutive trading session, as forecasts for less than 1 GW wind supply coupled with an unplanned power station outage and increased demand bolstered market sentiment, sources said.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
At 11 am London time Tuesday, the baseload day-ahead power contract jumped GBP3.30 from Monday's close to reach GBP37.30/MWh, while peakload power for Wednesday delivery added GBP4.25 to reach GBP41.50/MWh.
"A drop in wind production contributed to higher day-ahead prices," a trader said, adding that a few plant problems and stronger demand also supported the prompt market.
UK's network operator National Grid expects peak wind power generation to plummet to 966 MW Wednesday, down from Tuesday's forecast of 3 GW.
At the same time, peak power demand is expected to rise above 50 GW Wednesday, above Tuesday's demand expectation of 49.6 GW and higher than Monday's peak demand out-turn of 48.7 GW, the grid data showed.
National Grid's REMIT website also showed that an unplanned outage at the 480 MW West Burton coal-fired power plant Monday continued to reduce output from unit 4 to zero. Power plant operator EDF Energy expects the unit to restart Friday.
A similar supply scenario is expected Thursday with low demand tightening supply margins, the trader said. National Grid expects surplus margins for Thursday to drop into negative territory for the first time in the winter, to minus 734 MW, which means supply is likely to be lower than demand.
Meanwhile at midday Tuesday, wind power generation reached 1.6 GW, pushing higher the use of gas-fired power plants, which produced 16.6 GW of power, the grid said.
Coal-fired power plants generated 7.8 GW of power, while nuclear generation was seen at 7.4 GW, the grid said.