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, with only one half-hour clearing above £100 which is not exceptional for this time of year.  It is too early to say how things will develop into this evening but Loss of Load Probability for SP39 has already reduced from a very high 93% to 0% as of 11:00 and will be revised throughout the day today.

These latest developments illustrate the critical nature of grid scale storage projects to support the transition to a cleaner renewable generation stack.