Utility Week

UTILITY Week 6th March 2015

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26 | 6th - 12th March 2015 | UtILItY WEEK Markets & Trading This week Spare capacity costs National Grid £30m 'Prudent' payouts intended to ensure sufficient capacity in the event of a supply emergency National Grid paid power sta- tions more than £30 million to be on standby this winter, with the vast majority of payouts made to fossil fuel generators whose capacity was never used. Utility Week can reveal that about £30 million of the £32 million total payouts were made to old thermal plants, which were also paid to carry out thorough monthly testing to ensure their reliability. National Grid told Utility Week the payouts were "prudent". "The return of generation as expected, good levels of generator reliability, consistent continental imports, high levels of renewable output and generally milder weather conditions meant we didn't have to use the two products we procured. However, they were there just in case we needed them, had some of these factors gone the other way," said Peter Bingham, project leader for new balancing services. The so-called 'capability fees' for the power plants owned by SSE, Scottish Power and RWE totalled £23.5 million and were paid to ensure the plants remained on standby, to be ramped up in a supply emergency. In addition, the plants were paid £6 million to per- form monthly reliability tests, as part of their supple- mental balancing reserve (SBR) contracts. A National Grid spokesman told Utility Week ahead of the official report due later this month that the SBR capability costs were in the region of £15/kW, compared with £10/kW paid to energy users that agreed to make demand-side reductions if required by National Grid. JA EnErgY Nuclear output falls to five-year low Nuclear power generation fell to its lowest level since 2009 last year as a string of nuclear reac- tors were shut because of safety concerns. The government's initial find- ings for 2014 show that nuclear output was 94.87TWh last year – the lowest level of generation since 2009, when output fell to 94.26TWh. In 2012 and 2013, nuclear output was recorded at highs of 133TWh and 123.5TWh respec- tively. But unplanned outages across EDF Energy's nuclear fleet last summer caused levels to slump, taking a toll on EDF Energy's earnings for last year. EDF Energy's UK earnings before tax, depreciation and amortisation for 2014 fell 8.5 per cent year on year to €1,941 mil- lion, due mainly to unplanned outages at its nuclear stations at Heysham and Hartlepool. The nuclear operator lost 2.5GW of nuclear capacity over the summer aer a crack was found in a boiler at Heysham 1. As a safety precaution, all units of the same design were removed from service for safety inspections. All have now returned to service, but at only 75-80 per cent capacity, knocking 240MW off EDF Energy's fleet. The shortfall was met by increased use of gas-fired power, which rose to its highest share of the energy mix since 2011, at 31 per cent. EnErgY UK-Belgium power link moves ahead National Grid has signed a deal with its Belgian counterpart, moving ahead with the planned 1GW Nemo power interconnector between the two countries. The final agreement between National Grid and Elia will bring forward the UK's first power link to Belgium, and the first interconnector project to be built under Ofgem's cap and floor funding regime. The regulator approved the plans in December last year, set- ting the annual revenue floor for Nemo at £50.4 million over the 25-year duration of the scheme, while the annual revenue cap was set at £80 million. These levels could be adjusted follow- ing a final assessment of costs aer construction, Ofgem said. Energy secretary Ed Davey welcomed the deal as a step forward for security of supply and the efficient use of increas- ing renewable energy. "Better electricity links to our neighbours help to guarantee our energy security at the lowest possible cost to billpayers and mean we can use renewable electricity more effectively, allowing excess generation to be exported," Davey said. Old thermal plants were paid for monthly tests Average wholesale baseload UK power prices by delivery date, £/MWh The Energy UK wholesale market report reveals that over January, the average daily price for power was £39.25/MWh and the sport price for gas was 46.31p/thm. These prices have fallen from a peak at the end of last year. This follows a reversal in trend where at the end of 2014, long term seasonal products were generally more expensive than short term products. At the start of 2013, the opposite was the case. Source: APX, Leba and the ICE £80 £75 £70 £65 £60 £55 £50 £45 £40 £35 £30 01/02/2013 01/03/2013 01/04/2013 01/05/2013 01/06/2013 01/07/2013 01/08/2013 01/09/2013 01/10/2013 01/11/2013 01/12/2013 01/01/2014 01/02/2014 01/03/2014 01/04/2014 01/05/2014 01/06/2014 01/07/2014 01/08/2014 01/09/2014 01/10/2014 01/11/2014 01/12/2014 01/01/2015 01/02/2015 Spot Month ahead Season ahead Year ahead Two years ahead

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