UK power prices deliver at new record high

Market: Electricity
06/09/21

The UK day-ahead power markets cleared at a record high for delivery today amid forecasts for low wind output and limited plant and interconnector availability, along with demand beginning to rise again following the end of the holiday period.

The UK N2EX was at £219.46/MWh for base load on Monday, surpassing the previous high of £198.79/MWh in January. Hourly prices hit a high of £722.94/MWh but were below the record of just less than £1,500/MWh at the start of this year.

Wind generation was forecast at below 1.5GW throughout the day, with lows of about 800MW expected. And realised wind power generation has been even lower than forecast, at 400-600MW for most of the morning.

Availability on the 2GW IFA interconnector with France is scheduled to be reduced to 1.5GW until 10 September and then to 1GW from 10-17 September.

Combined-cycle gas turbine (CCGT) availability has been low since the start of this month, although units have steadily come back on line in recent days, with more scheduled to end shutdowns today. The 810MW Seabank 1 plant and 1.4GW South Humber Bank facility both are scheduled to return to service this afternoon.

System prices have been up to £283.65/MWh so far today, with the potential to rise again in the evening as demand picks back up. Loss-of-load probability forecasts remain above zero for the evening peak-demand hours, with de-rated margins below 3GW, National Grid ESO data show.

Early this morning, units at EdF's West Burton A coal-fired plant were accepted into the balancing mechanism with offers of up to £3,950/MWh, while Uniper's Grain 6 combined-heat-and-power plant was accepted at £4,950/MWh.

West Burton A's start-up this morning has brought coal-fired generation to above 1.5GW for the first time since March.

Demand began to rise again at the start of September as the holiday period comes to an end. Transmission system demand was forecast to average 28.2GW and peak at 33.8GW today, compared with August when demand averaged 25.7GW and peaked at 33.2GW. Low output from embedded wind also supports demand in the transmission system.

Demand in August was up by just 0.8pc on the year, down from increases of 2.2pc in July and 12.3pc in the second quarter. The holiday period will have suppressed demand, while temperatures were also below the long-term average for most of that month. And increasing supply chain disruption in many industries may have also hit demand recovery in the past two months.

Higher wind and the return of some CCGT and nuclear units could keep price spikes lower during the rest of this week. But the system is expected to remain tight — if less so than today — and high gas and emissions prices will continue to provide support.

The 1.2GW Heysham 1 nuclear plant is scheduled to return from maintenance this week, although the plant's shutdown has been extended several times since it went off line in mid-July.

By Josh Evans

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31/10/24

Q&A: EU-GCC eye alliance anchored in energy, security

Dubai, 31 October (Argus) — Russia's invasion of Ukraine in 2022, and the start of the war in Gaza last year hastened the strengthening of relations between the EU and the Gulf Co-operation Council (GCC) ꟷ something both blocs had long been striving for. Argus sat down with the EU's special representative for the Gulf region and former Italian foreign minister Luigi di Maio at the Future Investment Initiative in Riyadh this week to discuss his hopes for the future of the relationship. You spoke at the conference about a comprehensive EU-GCC trade agreement. Such a thing has been on the table for a while without really moving forward. Could the first ever EU-GCC summit two weeks ago in Brussels provide the push needed for it to happen? The final statement of the summit clearly emphasised the importance of finalising the negotiation in a positive way, and reaching the free trade agreement at a regional level as soon as possible. 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LatAm-China energy ties lurk for next US leader

30/10/24

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30/10/24

LatAm-China energy ties lurk for next US leader

Sao Paulo, 30 October (Argus) — China's growing economic reach into Latin America's energy and commodities has figured little in the latest US presidential campaign, but either Kamala Harris or Donald Trump may eventually have to face the topic. China began formally trying to increase its reach into Latin America in 2018, when it invited the region to be a "natural extension" of its Belt and Road Initiative (BRI). The effort has brought mixed results. So far, 22 countries in Latin America and the Caribbean have joined the massive Chinese infrastructure initiative, but hydrocarbons producers such as Colombia and regional powerhouse Brazil have not. The latter wants to "take the relationship with China to a new level without having to sign an accession contract," the Brazilian special presidential adviser for international affairs Celso Amorim said on 28 October. This came after agriculture minister Carlos Favaro said earlier that joining the BIR would be "positive" for the country. "There are projects that Brazil has defined as a priority and that may or may not be accepted [by Beijing]," Amorim said. Still, China has found other ways of increasing its grasp in Brazil, such as increasing exports of electric vehicles — with automaker BYD setting a R5.5bn ($1.1bn) investment plan in the country — and crude . But China is a major trade partner for all of Latin America. Exports of all goods from Latin America and the Caribbean to China reached a record $208bn in 2023, with Chinese exports into those regions hitting $242bn, according to Boston University Global Development Policy Center. Around 70pc of exports from Latin America to China are of copper, soybeans and crude — the two latter mainly coming from Brazil — while another 20pc comprise of beef and livestock. With or without the BRI, China's larger grasp in Latin America is seen as problematic in the US by both sides of the political spectrum. "The discourse of competition between the US and China has crossed party lines," according to Conrado Baggio, an international relations professor in Cruzeiro do Sul University. "Any candidate for president needs to present a firm and combative rhetoric towards Beijing." Chinese efforts de-dollarize the world economy also concern Washington, but mildly. China along with the other Brics countries — Brazil, Russia, India and South Africa — have led efforts to reduce the world's economy dependence on the US dollar and are working on an independent crossborder payment settlement platform to "minimize trade barriers." But results have been mixed as well. For instance, the Chinese yuan surpassed the dollar as the main currency in bilateral trades between Brazil and China in April-June 2023. But the American currency is still the main coin on over 80pc of Brazilian trade with other countries. "De-dollarization initiatives have hardly gone beyond rhetoric," Baggio said. Harris and Trump have opposing views on many topics and their approach to China is no different. Trump is likely to take a more confrontational stance on China, including higher tariffs and sanctions. That could naturally increase trade between Latin America and China, according to Fernando Galvao, a Brazilian economic analyst. On the other side of the aisle, Harris might choose a more diplomatic strategy. "Harris may prioritize rebuilding international alliances and strengthening multilateral institutions," Galvao added. Still, a Harris administration is more likely to emphasize environmental and human rights issues, which could pressure Latin America to adopt more sustainable policies. Failure to do so could lead to more trade with China, he added. But although the US will certainly keep an eye on China's relationship with Latin America, that is hardly the main concern within the US' foreign relations scope. "Given Washington's increasing involvement in Europe, with Russia and Ukraine, and in the Middle East, with Iran and Israel, Latin America may occupy a secondary position within the US' concerns," according to Baggio. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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