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Lockdown & Bank Holiday Combine to Create Record Lows in UK Energy Demand and Emissions

Britain’s electricity network witnessed another exceptional weekend during the most recent bank holiday as its carbon intensity dropped to lifetime lows. Alongside the record-breaking carbon drop, wholesale power prices also went below-zero.

 

Two records in a single weekend

 

Drax Electric Insights shows the average day-ahead wholesale power rate for 24 hours on 22nd May stood at £9.9 per MWh. During the early hours of the day, prices fell to -£52.03 per MWh as well. This rate is over two times lower compared to the previous record. The previous record logged was In December 2018, the day-ahead price levels for wholesale electricity fell to £4.62 per MWh.

 

These prices were not the only trends set that weekend. The carbon emissions from electricity generation reached a lower level over the bank holiday weekend. On the 23rd May, the average carbon intensity level stood at 61gCOD per kWh. 61gCOD is 15g lower than the last record that was seen on 17th August last year.

 

The carbon intensity is a measure of the amount of CO2 (Carbon Dioxide) required for generating 1 unit of electricity.

 

National Grid Electricity System Operator (NGESO) announced this news on Twitter, calling the electricity grid ‘the greenest that it has ever been.’ On Sunday, 24th May, the carbon intensity levels were averaged at 46g CO2 per kWh. With strong wind generation and increasing levels of solar energy, the lowest carbon moment on 24th May was 33g COD/kWh as shared by Drax Electric Insights.

 

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Balancing low demand

 

A presentation by the NGESO last week mentioned that demand was expected to hit an all-time low during the weekend. While bank holidays over the past few years have witnessed drops in demand, it has never been this steep. However, with the holiday and pandemic-induced lockdown, the electricity requirement fell to a record low. When demand falls beyond a certain threshold, the National Grid has to take additional measures to stabilise the network.

 

Anticipating the drop in demand, the National Grid used its ODFM or the Optional Downward Flexibility Management service to balance the electricity network. This new tool allows the offsetting of electricity over-generation while also eliminating the need for turning off embedded generation.

 

Kiwi Power was called on to take part in this measure to balance the grid during the bank holiday.

 

A peek into the future

 

Chris Regan, the head of Energy Trading Services at EDF Group Local Energy, posted his comments about how the Covid-19 crisis and the ODFM create a picture of what the industry’s future could become. He stated that EDF assisted in balancing the grid using the ODFM scheme, which has provided the required demand increase for the management of excess power.

 

As an active participant, EDF provides assets for halting the generation or absorbing energy like a battery.

 

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Electricity demand has fallen considerably with the current situation, and more events like this are to be expected in the future. ODFM provides the grid with a much-needed increase in flexibility. Kiwi Power head trader, Aaron Lally, stated that the May bank holiday weekend was a peek of what the electricity grid must be like if the National Grid meets the 2025 targets. It also presents a strong case for battery storage.

 

However, management of the grid during low-power demand comes with a cost. SSE Generation submitted a request to the NGESO for deferment of the Balancing Services Use of System (BSUoS) costs due to the pandemic. These costs are being estimated at around £500 million. While the renewable generation of electricity in the UK continues to grow, demand has dropped to 20% below the average.

 

Many energy firms are also stressing the importance of increasing storage capacity for grid balancing in the coming years. Juliet Davenport, Good Energy’s chief executive, shared how energy firms are frustrated with the UK government’s approach towards the energy market’s future. He mentioned the government’s ‘obsession’ with creating inflexible nuclear power plants and the lack of diversity and foresight.

 

This situation has shed light on the need to work on battery storage policies and to transform the challenge for balancing low-demand into an opportunity.