Supply exceeds demand for traded electricity, shows latest UK wholesale market report

May 2014 UK electricity generation mixSupply of electricity traded in May was three times greater than demand, according to the latest Energy UK wholesale electricity market report, while trading of electricity delivered, as well as demand, in May was similar to April.

Following the historical trend there is a greater volume of trade for near term delivery than in the longer term, though there was continued liquidity for the season ahead. This is to be expected.

Companies trade to manage risks and shape their portfolio to meet expected consumer demand. Forecasts closer to delivery are more accurate than the longer forecasts which entail greater risks; as a result interest lessens in trades further out.

There has been a shift of about 7% in total share of generation from Coal to CCGTs from April to May. Note: this report gives the position in the market after the introduction of the market maker on 31 March as part of Ofgem’s new Secure and Promote Licence Conditions.

Generation Mix: In April, GB electricity came from:

  • Coal: 30%
  • Gas power stations: 29%
  • Nuclear: 22%
  • Wind: 5%
  • Hydro: 1%
  • Interconnectors: 7% net – with 6% from France and 2% from Holland
  • Others (including Oil, Pumped): 4%

However, the ‘22%’ generation figure for UK baseload nuclear does not include the ‘6%’ contribution imported into the UK  via the French interconnector – almost all of which will be nuclear-generated by EDF. So the more accurate picture is that coal, gas and nuclear each generated about 30% of total UK electricity supply in April 2014.

Market Making involves an obligation to post bids and offers in the wholesale electricity market during two daily windows and according to specific requirements.

The Wholesale Market Report sets out the picture at the season ahead and covers the wholesale price of power for different dates of delivery and volumes, traded on the wholesale market. It also sets out the volumes of power traded over the last three months and the generation mix for the preceding month, including wind and hydro-electricity.

Wholesale electricity market prices for Winter 2014-15: Source - London Energy Brokers Association
Wholesale electricity market prices for Winter 2014-15: Source – London Energy Brokers Association










Winter Season 2014-15 prices creep up

The price of electricity to be delivered over winter 2013 averaged at £54.33/MWh from April to September 2013, compared to £48.99/MWH the previous winter.

So far since the end of March 2014, electricity to be delivered over winter 2014 has averaged £50.42/MWh. The price of electricity to be delivered over summer 2014 averaged £47.73/MWh, compared to £49.32/MWh for summer 2013.


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