• Last week we had the IFA interconnector trip on 8th October to keep us busy, with National Grid subsequently calling on STOR to keep the system running. We can see this in BM prices, with maximum offer prices this week down nearly £200/MWh. Prices have been a mixed bag this week, with the front season spark spread relatively flat, but the front month falling. This has been driven by greater nuclear availability in France for next month, with the nuclear output forecasts released in April now looking on the low side. Next week looks more comfortable than this week, with greater nuclear availability and stronger wind. However, this masks large variations day on day. This weekend and Friday evening (16/10) look extremely tight. The main drivers are: Low levels of wind – down to 3.5 GW at its lowest Higher than seasonal levels of demand owing to cold weather Reduced CCGT availability due to planned and unplanned outages Reduced biomass availability due to an unplanned outage All of this means the UK will likely need the full CCGT fleet running and some coal too. We will be watching closely to see how our machine learning forecasts evolve throughout the day and adjusting

  • National Grid announced yesterday afternoon that they were 'exploring measures and actions' to make sure there is enough power generation available for the remainder of this week.  Grid subsequently posted that the immediate concern with margins had abated and this morning said that margins remain adequate today, and that they will be monitoring the situation for tomorrow and the weekend. The Limejump trading team has identified that Friday is likely to be the pinch point for National Grid due to lowering wind generation over the next 36 hours. The latest worries about the lack of generation to meet expected demand is being driven by a variety of reasons including reduced plant availability, lower wind forecasts and interconnector flows. This follows a tight September which included the first Capacity Market Notice issued by Grid since Q4-2016. Looking at the next 48-72 hours, Limejump analysis shows that Grid will still need to have close to the maximum CCGT fleet (gas generation) online, based on the current demand forecast for today. Wind is forecast to fall from 3GW available this evening, down to 1.5GW on Friday. With so many changing variables, power prices are likely to see volatility.  So far, day-ahead hourly prices have remained reasonably steady,

  • National Grid procured 90 MW of dynamic containment, the new premium frequency response product on Thursday in the first ever auction of this type. The product is faster acting than Firm Frequency Response, with DC output delivered in 0.5 seconds compared with 2 seconds. Key stats: 165 MW of assets bid by operators into the day ahead auction 26 MW withdrawn 49 MW rejected by National Grid on price grounds (with £24/MW/hr deemed too steep a price to pay) National Grid aim to procure 500 MW Low Frequency response from the auction to begin with. They have plans to increase that to 1000 MW Low and High in the future. This is something Limejump is actively exploring as it represents an exciting new service for battery owners. Week ahead fundamentals Nuclear availability increases by 300 MW for next week, we are seeing demand dip and renewables forecast lower. The net result is we expect the system to be more comfortable than last week. Closer to delivery interconnector flows and plant trips can dictate price action on the day hence why it is vital to have a 24/7 shift team to monitor market developments, which is exactly what Limejump brings to the table.  

  • 1st subsidy-free wind farm to enter the Balancing Mechanism Largest wind site addition to Limejump’s generation portfolio Energy tech company, Limejump, has been awarded the contract to trade the power output of the first subsidy-free Scottish wind farm using next-generation wind turbines at Crossdykes Wind Farm in Dumfries & Galloway, Scotland. The 46MW onshore wind farm, developed and owned by Muirhall Energy Limited and WWS Development LLP, is one of the first subsidy-free wind farms in the UK. Notably, Crossdykes is the first subsidy-free wind farm to enter the Grid Balancing Mechanism, and is the largest wind site to enter Limejump’s generation portfolio. Limejump was the first utility off-taker (in August 2018) to enter battery storage units into the Grid’s Balancing Mechanism via its tech platform – giving battery operators and distribution connected generators a new revenue opportunity. With Crossdykes, Limejump has used intelligent price management to offset risk via a “track & trade” Power Purchase Agreement (PPA). It has used market pricing information to ‘track’ the market and lock the price in at the optimum time. This methodology rewards sophisticated trading and flexibility with higher returns whilst managing the price fluctuation risk. Limejump will also enter Crossdykes into the Capacity Market. The commercial

  • Exceptional circumstances resulted in Grid issuing their first CM notice since Q4-16 (excluding the false alarm in June-17)! One week on, we’ve taken a look back to reflect on this Extraordinary occurrence for the UK energy industry. Read on to find out insights on why this happened from the LJ team. First things first – what was the notice? Below is the note issued by National Grid on Tuesday afternoon last week. What is a capacity market notice and why are they issued? A capacity market notice can be issued for 3 reasons: The System Operator gives a Demand Reduction Instruction or an Emergency Manual Disconnection Instruction to one or more DNOs An Inadequate System Margin is forecast (at least 4 hours in the future) Automatic Low Frequency Demand Disconnection takes place In this case rule 2 was satisfied and National Grid forecast the margin set out in the capacity market rules would fall below a certain threshold. In layman’s terms, this means National Grid was forecasting very little excess supply relative to demand. What do generators have to do when a Capacity Market Notice is issued? After an instruction is issued, generators holding a Capacity Market contract must be ready to generate when National Grid forecast a

  • On September 4th, National Grid Electricity System Operator (NGESO) provided clarity on the state of GB participation in the European Replacement Reserve (ERR) market being set up by the Trans-European Replacement Reserve Exchange (TERRE). GB market participants have for a while been uncertain as to whether testing of the market would resume in October after delays during COVID19 and therefore what preparations needed to be made. NGESO said on September 4th that it would not be possible to facilitate GB participation in the ERR market before the end of this year. Given this, and issues surrounding the post-Brexit/EU Transition Period, we are now faced with the bigger question of whether the EU and national parliaments will vote to allow GB to join TERRE and use the Libra platform. It is envisaged that the ERR market will bring greater opportunities to GB flexible assets able to participate in a larger European market, so the further delay is disappointing for NGESO and the participants in the GB market who have invested significant effort and resources in readiness. Limejump welcomes, however, the continued commitment of NGESO and BEIS to deliver a resolution ahead of the end of the Brexit/EU Transition Period. Meanwhile, asset owners wishing

  • This week, it’s been reported that National Grid ESO (NGESO) is to build on the existing ODFM product that was launched earlier this summer.  Greater scope for participation from distributed energy resources (small to medium generators in particular) will create a two-way benefit as it potentially increases revenue for independent asset operators and provides a more economic option for NGESO’s flexibility procurement. Limejump demonstrated earlier in the summer that as an agile operator it was able to respond quickly to the opportunity to provide flexibility at short notice.  It was one of the earliest to sign-up to and bid in the ODFM and provide NGESO with the option to turn-down solar assets for the first time.  Expansion of the product will lead to greater system resilience in the long-term. Moving away from the Sizewell B type arrangement, and creating a transparent product for a much larger pool of generators and flexibility providers, will result in important efficiencies and is consistent with the Grid’s objective to promote and facilitate competitive markets. Ultimately, we envisage a more commercialised ODFM product functioning and in use by Summer 2021.  The structure and type of procurement remains an open question as current ODFM bids are taken on a

  • A big societal shift.   That’s what National Grid’s Future Energy Scenarios (FES) are calling for to reduce carbon emissions in the energy sector and mitigate against the effects of climate change. We’d encourage any readers not yet familiar with the FES to read the 2020 FES in 5.   Until now this annual look at the approaches for decarbonising the UK energy sector has been constrained by the 80% targets. But with the 2019 legislation to reach Net Zero by 2050 enshrined in June last year – National Grid’s analysts, researchers and experts have been able to mark out clear, target meeting, scenarios. Last year, none of the four models proposed in the FES got us to Net Zero. This time – three of the four get the UK over the line. There are crystal clear trends in the 2020 FES that make it stand out from previous years: All net zero scenarios see no fossil-fuel electricity generation without Carbon Capture Usage and Storage (CCUS) to abate it. Over 90% of electricity generated will come from wind, solar, nuclear and bioenergy with CCUS by 2050. For Limejump customers (and their assets and revenues), the trend is clearly positive for battery, wind and solar. Here at

  • Panas Kalliantas, a Short-Term Trader at Limejump, discusses having to adapt and be flexible whilst balancing mechanism units and hedging excess risk for our clients. Trading from home has its challenges for everyone, but as Panas explains, we have adjusted fast and kept communication extremely high in order to execute the team strategy. Despite going from ten screens in the office, to two screens at home, Panas and the team have maintained considerable effort and constant collaboration staying 100% committed to our values as a business; challenge, innovate and deliver sustainability.