CORRECTED: UPDATED: UK power system warning means ‘big volatility’ next winter

Corrected: The below article, concerning the issuance of a system warning by the UK electricity grid operator, originally stated that a reduction in output from SSE’s Peterhead gas-fired plant ‘compounded the problem’. Although remit data showed the plant did record an unplanned reduction in output earlier in the day, output was back to maximum capacity before the issuance of the warning. A corrected article follows. 

The UK issued its second warning of inadequate electricity supply margins in six months on Monday evening, covering the period 19:00-21:30 London time.

According to one trader, the need to issue a system warning on a day when demand was not particularly high means next winter could herald a great deal of volatility on the UK power market.

E.ON’s Connah’s Quay secured a payment on Monday of £1,250 (€1,587)/MWh for providing almost 100MW from one of its four 375MW combined-cycle gas turbine (CCGT) units during the half hour period starting at 21:30, according to Elexon data.

However the balancing market price peaked 90 minutes earlier at just above £143/MWh as system operator National Grid sought to pull additional generation or demand-side capacity into the market.

Data showed a partial outage on a 2GW interconnector linking the UK to France came at the same time as a planned outage on the 1GW BritNed link to the Netherlands.

A failure at Centrica’s 900MW Langage CCGT compounded the problem.

ScottishPower’s Rye House CCGT, which has 715MW of capacity, also tripped early on Monday morning which exacerbated the issues later in the day.

The unplanned outages coincided with the start of the summer maintenance season, when several thermal plants were already offline for extended periods.

‘Standard tool kit’

“National Grid issued a notice to the industry yesterday evening, 9th May, at 19:00 asking for more generation to be brought onto the system,” a spokeswoman said.

“The notice that was issued is part of our standard tool kit for balancing supply and demand and when issued is not an indication there is an immediate risk of disruption to supply or blackouts; it is an indication that we would like our power held in reserve to be higher.

“The Notification of Inadequate System Margin (NISM) was a result of multiple plant breakdowns. An additional 1,500MW was requested for between 19:00 and 21:30. The market responded to the notice and the NISM was cancelled at 21.15.”

On a day in May when demand was not particularly high, the need to move to a system warning due to the loss of import capacity in part reflects how reliant the market can be on imported power due to a swathe of thermal plant closures in recent years.

“It shows you that winter is braced for some big volatility,” one utility trader said.

He added that the front winter contract also failed to reflect the risk of similar system events next winter, which was deterring utilities from hedging the component contracts. jamie.stewart@icis.com and henry.evans@icis.com