Greater nuclear availability and stronger wind predicted for coming week
Last week we had the IFA interconnector trip on 8th October to keep us busy, with National Grid subsequently calling on STOR to keep the system running. We can see this in BM prices, with maximum offer prices this week down nearly £200/MWh. Prices have been a mixed bag this week, with the front season spark spread relatively flat, but the front month falling. This has been driven by greater nuclear availability in France for next month, with the nuclear output forecasts released in April now looking on the low side.
Next week looks more comfortable than this week, with greater nuclear availability and stronger wind. However, this masks large variations day on day. This weekend and Friday evening (16/10) look extremely tight. The main drivers are:
- Low levels of wind – down to 3.5 GW at its lowest
- Higher than seasonal levels of demand owing to cold weather
- Reduced CCGT availability due to planned and unplanned outages
- Reduced biomass availability due to an unplanned outage
All of this means the UK will likely need the full CCGT fleet running and some coal too. We will be watching closely to see how our machine learning forecasts evolve throughout the day and adjusting our trading strategy accordingly.