System prices in the UK's power balancing mechanism hovered near zero throughout the middle of the day as weak demand again left the system oversupplied.
The average system price for the first 24 half-hour settlement periods of the day was just £10.29/MWh, and fell to zero in three of these periods (see chart). The price was well below the day-ahead exchange hourly price for the same period, which delivered at an average of £25.69/MWh for these hours.
Demand has trailed forecasts, leaving the system oversupplied (see chart). System demand was just 28.7GW by period 18 (08:30 local time), compared with forecasts of 30.3GW.
System demand was lower than forecasts by an average of 0.65GW yesterday, and was almost 3GW below forecast at 20:30 local time.
System demand excludes embedded generation. Total demand including embedded wind and solar was 34.38GW by midday, down by 3.6GW from the same period yesterday and 4.2GW lower than at the same time last week, data from UK generator Drax and Imperial College London show. Demand for all of yesterday averaged 33GW, down by 1.75GW from a week earlier.
Demand patterns had already begun to shift last week after prime minister Boris Johnson advised people to work from home where possible to counter the spread of the coronavirus pandemic. Supplier Octopus Energy said that 30pc of households changed consumption patterns markedly last week, likely as people worked from home.
Subsequent measures have added pressure on demand. On 20 March Johnson asked all pubs and restaurants to close. Yesterday he ordered all non-essential businesses to close, and said people should only leave their homes for food, health reasons or essential work. Police will have the authority to disperse any public gatherings of more than two people.
Similar measures taken in other European countries had a significant impact on demand last week, and led to widening discrepancies between actual and forecast demand.
The UK forward curve has been pricing in reduced power demand over the coming months, causing forward margins for gas plants to slide.
The summer 2020 and winter 2020-21 outright power contracts have recorded heavy losses in recent sessions, with both falling to contract lows yesterday. And the summer 2020 clean spark spread for 49.13pc efficiency fell to an five-month low of £2.29/MWh.
