(Montel) UK day-ahead power prices hit a new record high of GBP 2,500/MWh on Tuesday amid expectations of a sharp drop in already low wind generation levels and still surging gas prices.
The daily average was pegged at a year-to-date high of GBP 424.61/MWh.
The Epex Spot auction reached GBP 1,422.20/MWh for the 20:00-21:00 period.
Peak wind generation was forecast to drop from 3.6 GW in the current session to just 2 GW on Wednesday, TSO data showed.
The renewable energy source – which plays a vital role in the UK’s energy mix, at times providing well over 20% of total power – accounted for just an 8% slice at the time of writing.
Therefore, gas’s share was still at over 50%, at a time of record-high prices.
The front-month UK NBP gas price this morning soared more than 8% to a multi-year high of 165.54p/th, on Ice Futures.
“I’ve never seen anything like it,” said a UK power trader, noting “gas is so strong.”
“Very little has changed in the market [since last winter], with storage capacity for renewable sources of energy still limited and increasing gas and carbon prices,” said David Henderson, managing director of energy transition at asset management firm PX Group, in a note.
“This means that at peak demand, and when weather conditions don’t suit, more traditional sources are switched on and prices have the potential to skyrocket during certain times of the day.”