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The Week in Flexibility: Wednesday’s BSAD trades make an impact before weekend demand outrun hits 500mw

The Week in Flexibility: Wednesday’s BSAD trades make an impact before weekend demand outrun hits 500mw
Each week we take a look at what’s happening in the world of flexibility.

Recent weeks have been dominated, first by a long run of negative pricing, and then the provision of “footroom” services to National Grid as demand shrunk to record lows with a simultaneous exceptional performance from renewables during Coronavirus Lockdown.

Last week, we saw a return to a more settled flexibility market. But that doesn’t mean it was without interest and our analysts were keenly watching developments to ensure we make the best of every situation for our customers.

Wednesday stood out for us. The power system was oversupplied for most of the day, caused in the most part by a demand outturn below the National Grid forecast. However, rather than pushing down prices thanks to the long system, the system price remained mostly above £20/MWh. This was caused by National Grid traders executing a large volume of BSAD sell trades at £18-22/MWh.

These BSAD (Balancing Services Adjustment Data) trades are equivalent to actions taken in the Balancing Mechanism (BM) but can be done for longer periods of time in the future, providing price support for the intraday market. The key differences between BSAD and the BM are that BM actions occur only after gate closure (one hour before delivery begins) and is meant for real time management. National Grid can make BSAD trades at any point and these trades cover the following services:

  • Forward Contracts;
    • Energy Related Products;
    • Pre-Gate Closure Balancing Transactions (PGBTs); and
    • System-to-System services,
  • Maximum Generation;
  • System to Generator Operational Intertripping;
  • Emergency de-energisation instructions;
  • Demand Side Balancing Reserve; and
  • Non-BM STOR.

The price of these actions feed into the imbalance price via the Buy Price Price Adjustment (BPA)/Sell-Price Price Adjustment (SPA). The BPA is added when the net imbalance of the Transmission System is short. The SPA is added when the net imbalance of the Transmission System is long. The BPA/SPA does not have a volume. It simply adjusts the volume-weighted average price.
Last weekend, we witnessed persisting negative prices on Saturday, following a high wind generation delivery at around 13GW while demand was marginally above the forecast from National Grid.

While relative calm ensued last week, we continue to see more complex and interesting market conditions – be it reduced demand, new market products or peaks in renewables.

Tune in next week for the next installment of Week in Flex.

Flex in numbers:

Top System Price of the week: £48/MWh
Lowest System Price: -£55/MWh
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