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DC prices drop to 12-month low in latest auction

CapEx-Free Battery

The first auction under National Grid ESO’s new procurement targets for the Dynamic Containment (DC) scheme took place on 31 October.

The results saw prices drop below £17/MW/h for the first time in 12 months (since October 2020). By volume, the weighted clearing price averaged £16.70/MW/hr across the day with EFA6 clearing at the day’s low of £14.90/MW/hr. There was no requirement for the high-frequency DC service.

The graph below shows both accepted and rejected volume, as well as the auction clearing price, across EFA blocks.

DC Auction summary (accepted volume)

DC prices drop to 12-month low in latest auction

DC auction summary (value)

DC prices drop to 12-month low in latest auction

Commenting on the results Senior Trader at GridBeyond Seamus King said:

“Unlike many other technologies, batteries have a unique ability to trade across markets. Since its introduction we’ve seen consistent pricing of £17/MW/h from all DC participants, so this dip in prices could be a sign of things to come.”

 

GridBeyond UK Market Strategy Manager Zohreh Mohammadi added:

“The move of the DC programme to EFA blocks has meant that National Grid ESO is able to fine-tune its requirements across the day. But crucially the rule changes have meant that providers have additional flexibility to move in and out of DC on a more granular level.

“As we noted in our recent white paper, the move to EFA blocks was more than likely going to result in less MW procured and at lower prices. This could be a signal that the DC prices might start to decrease, especially given the increase in participants and decrease in the requirements.

With multiple value streams to stack and optimise across timeframes – from day-ahead to real-time – getting the maximum price per hour of operation requires market insight, automated response, an understanding of the constraints of the battery and the site on which it sits.

Reach out to us at GridBeyond if you’re a developer or owner of a utility-scale battery storage system and would like to know how we can support you to better optimise your assets.

For more information about National Grid ESO’s suite of faster-acting frequency response services, read out recent white paper here https://gridbeyond.com/lp/expert-explains-changes-on-the-horizon-for-battery-storage/

 

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