Wholesale power prices fell by more than a fifth between the final quarter of 2023 and the first three months of this year as mild winter weather and record renewable output suppressed gas demand.
According to energy market analysts at EnAppSys, day-ahead power prices on the EPEX and Nordpool exchanges averaged £64.57/MWh and £64.45/MWh respectively in the first three months of 2024.
This was around half the level seen in the same quarter last year and a drop of 22% when compared to the previous quarter’s figure of £82.50/MWh.
EnAppSys attributed the fall to mild winter weather, which limited drawdowns from gas storage, and strong renewable output, which hit a new quarterly record of 35.4TWh and accounted for almost half (47%) of all generation during the period. For comparison, renewables provided 33.4TWh of electricity and 33% of total generation during the first quarter of 2023.
Wind output also hit a new first quarter record of 25.2TWh, although this was slightly less than the 25.6TWh generated in the previous quarter. Biomass accounted for another 6.7TWh, solar for 1.9TWh and hydro for 1.6TWh.
Gas plants provided 33% of generation over the first three months of the year, producing 21.8TWh of electricity – a slight increase on the previous quarter’s figure of 20.7TWh but down from 23.5TWh during the same period in 2023.
This year-on-year decrease was despite first quarter nuclear output dropping from 9.6TWh to 7.9TWh because of outages at the Heysham, Torness and Hartlepool 1 and 2 plants. Although most of their restart dates were delayed by about a week, all but Hartlepool 2 have now returned to operation.
Imports via interconnectors provided a further 9.1TWh – a 75% increase when compared to the previous quarter – with France accounting for more than half (4.8TWh).
Paul Verrill, director of EnAppSys, which is now part of the Montel Group following its acquisition last year, said: “Wholesale electricity prices were generally on a downward trend through the quarter, and dipped to very low levels during some weekends in January and February and subsequently below £0/MWh in the fourth week in March during periods of very low demand coupled with high renewable generation.
“This downward trend was driven primarily by declining gas prices, reflecting limited storage drawdowns owing to generally mild weather conditions, despite the cold spell in early January.”
“Gas prices opened the year at £27.98/MWh and declined through the quarter, reaching as low as £19/MWh on 19 February before climbing to moderate levels and closing the quarter at £24.40/MWh,” he added.