Great Britain continues to see high day-ahead power prices, with no signs of a slowdown as prices hit a record high.
On September 14, the day-ahead auction cleared at new records across the board, with prices peaking at £1,675.30 per MWh for EPEX and £1,750 per MWh for Nordpool. That is a significant increase on the previous record price, with EPEX peaking at £1,500 per MWh on January 14, 2021, and Nordpool peaking a day earlier at £1,499.62 per MWh.
Volume weighted baseload prices also set new records at £461.17 per MWh for EPEX and £379.82 per MWh for Nordpool. This follows record pricing set just last week, where it was £281.11 per MWh for EPEX and £285.99 per MWh for Nordpool.
Phil Hewitt, director at EnAppSys, commented, “These high prices are being set by some generators sitting out of the wholesale market to get higher prices in the balancing mechanism.”
It’s unsurprising to see some generators want to take advantage of higher prices in the balancing mechanism, which hit a record high of £4,037.80 per MWh on September 9. However, all these high prices are also having an impact on interconnector capacity prices.
Hewitt continued, “We are also seeing interconnector capacity prices peaking at very high levels; this is a consequence of the new trading arrangements as a result of Brexit. Previously, implicit market coupling would have cleared these prices at a much lower level. The more aggressive interconnector capacity prices are feeding through to longer-term capacity prices on the interconnectors. Generally, the new trading arrangements are feeding into much higher costs for using the interconnectors compared to before 1st January 2021.
“We are surprised by the extent of these high prices because the market appears to be no more volatile than last week. It does feel that prices are overshooting.
“Looking ahead, Wednesday and Thursday look even more volatile compared to tomorrow, so we suspect that this is not the end of the high prices for this week.”
Signs of Brexit causing higher energy prices were already showing earlier this year, but since then things appear to be getting worse.