<article><p><i>Adds information on electricity margin notice </i></p><p class="lead">The N2EX UK day-ahead power auction saw its highest hourly price on record as a result of low plant availability, cold and still weather, and reduced power market efficiency after Brexit.</p><p>The hourly price for 17:00-18:00 local time hit £1,000.04/MWh, the highest-ever hourly price in the auction, market operator Nord Pool said. This lifted the overall day-ahead power price to £145.08/MWh, the highest since 19 September 2016, when it cleared at £168.25/MWh.</p><p>The auction actually was run twice because the price in the initial auction exceeded the maximum threshold of £750/MWh, Nord Pool said. When this happens, the order books are reopened and members have the opportunity to amend bids and offers.</p><p>The price threshold was reduced from £1,500/MWh after the UK left the internal energy market (IEM) on 1 January, to help members deal with potentially volatile prices during the first weeks of operations outside of the IEM, Nord Pool said.</p><p>The UK market is no longer coupled with other European markets following its <a href="https://direct.argusmedia.com/newsandanalysis/article/2173487">exit from the IEM</a>, causing the N2EX and Epex Spot exchange prices to diverge and a return to explicit allocation of flows, making the market less efficient.</p><p>The Epex Spot day-ahead auction price cleared much lower, at £737.45/MWh, for 17:00-18:00 local time, and at £130.04/MWh for Wednesday overall.</p><p>National Grid ESO said it was forecasting tight margins on the system for tomorrow until Friday and will explore options to raise its buffer of capacity. This afternoon it issued an electricity margin notice for the period 16:00-19:00 tomorrow because it forecast a margin shortfall of 584MW. Trading points, control points and externally connected system operators are requested to notify the grid of any additional capacity available, while suppliers are asked to notify of any additional demand control available. </p><p>Low temperatures in London are forecast to drop below zero tomorrow, more than 3°C below the seasonal norm, which will boost heating demand. Peak system demand was forecast at 47.9GW at 17:30, up by 1GW on the day. The highest system demand so far this winter was 46.5GW on 8 December, provisional data from National Grid show. Lows are forecast at below minus 2°C on Thursday and at minus 1°C on Friday.</p><p>And metered wind was forecast to drop to just 2.9GW by 17:00 local time tomorrow, almost 4GW lower on the day. Wind is forecast to remain relatively low on Thursday and Friday.</p><p>Even before the UK left the IEM, the market was prone to price spikes throughout this winter because of low availability. Calon Energy's 2.3GW of combined cycle gas turbine assets have been <a href="https://direct.argusmedia.com/newsandanalysis/article/2135421">mothballed</a> by administrators , while the 1GW <a href="https://direct.argusmedia.com/newsandanalysis/article/2141949">Hinkley B</a> and 1.1GW <a href="https://direct.argusmedia.com/newsandanalysis/article/2155497">Dungeness B</a> nuclear stations are off line on long-term shutdowns, reducing availability this winter.</p><p>Reactor 1 at the Heysham 1 station also remains off line. It went off line on 27 September and has seen its return date pushed back repeatedly. It is now due to begin ramping back up on Thursday evening, reaching full capacity on 16 January.</p><p>Added to this, the 1GW Britned interconnector went off line on an unplanned shutdown on 8 December. It is scheduled to return on 1 February.</p><p>This already resulted in price spikes last month during times of low wind and high demand, with the hourly price reaching £350/MWh on 8 December, which was a four-year high.</p><p class="bylines"><i>By Killian Staines</i></p></article>
