UK power market bearish despite Didcot outage

Henry Evans

21-Oct-2014

Published on the ICIS Dashboard at 14:04

Trade on the UK wholesale electricity prompt and curve was firmly bearish on Monday morning, as market participants awaited further detail on the severity of the fire that shut half of RWE’s 1.4GW Didcot B gas-fired power station on Sunday evening.

The fire, which broke out in one of two cooling modules at Didcot B, forced the shutdown of one of the station’s 730MW units.

UK intra-day and day-ahead prices fluctuated violently last week as the system came under pressure from a reduction in capacity instigated by the absence of half of the country’s nuclear fleet ( see EDEM 15 October 2014 ).

But prompt and curve prices seemed to be unaffected by the Didcot outage on Monday morning, with the day-ahead auction for Tuesday delivery on the N2EX and APX platforms settling at £39.31/MWh, its lowest since the end of August, with a strong wind power forecast of around 6GW throughout the day the chief driver.

Brokers screens also showed the bid and offer spread on the front month baseload had lowered by approximately £0.40/MWh from Friday’s closing ICIS assessment.

The latest update on RWE’s remit page at the time of writing on Monday showed the plant was estimated to return the following Monday. Although, a statement released on Monday morning said that it was “too early to give a definitive estimate of how long” the outage would last.

“The affected part of the site will remain non-operational until an investigation and repairs can take place,” the statement said.

The unit was running at full capacity during peak hours the previous week while offtake of gas from both Didcot units reached an average of 4.5 million cubic meters, according to National Grid data.

Despite successfully pre-qualifying both units for this December’s first capacity market auction, which will ensure plant availability during Winter 2018/19, RWE intends to run the plant on a limited hours option post-2016 that will lead to its closure before 2023 ( see EDEM 9 January 2014 ).

The fire is the third to afflict a UK power station this year following those at Ironbridge and Ferrybridge. E.ON took the decision to permanently close the 370MW biomass-fired Ironbridge facility in May, regarding it as uneconomic to repair ahead of its scheduled closure at the end of 2015 ( see EDEM 23 May 2014 ). Henry Evans


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