Price Volatility and Renewables Records to Start 2025

Price volatility and renewable generation records are nearly daily occurrences these days. Understanding the interplay between generation and market price volatility can provide good investment opportunities into projects that help balance the grid; a win for the investor and for the energy system.

The week commencing 6th January provided some prime (and very interesting) examples both in GB and Australia - let’s take a look at what happened.

It was chilly in GB

A particularly chilly week in GB culminated in a Wednesday (8th Jan) where low wind generation and soaring demand led to some seriously tight market conditions. Real-time demand exceeded NESO’s forecast by over 1GW, while wind generation fell short by the same amount. NESO, having anticipated a tight market, issued an Electricity Margin notice followed by a (quickly cancelled) Capacity Market notice. The result? The EPEX Intraday Market saw prices skyrocket –  multiples higher than the Day Ahead Market. The System Price soared to even higher levels.

For those who are interested, the System Price is set by the Marginal Bid Offer Acceptance issued by the NESO control room. NESO were accepting offers to turn up from a couple of large CCGTs which were often the price setters at the £3000/MWh level. Take a look at all of the different price signals below.

For those investing in the energy transition these pricing dynamics are interesting and critical to understand. This applies to both large scale assets but increasingly assets behind-the-meter who are accessing these markets via their supplier or an aggregator/optimiser as enabled by P415 and Virtual Trading Parties. Last Wednesday re-optimising flexible assets in the Intraday market could have significantly increased revenues (and ensuring it was supporting the grid to keep the lights on). The potential value at stake by trading between all of these markets is substantial. For flexible asset owners access to these markets is key, as is accurate modelling of their dynamics.

And sunny in Australia

Meanwhile, summer is in full swing in Australia and on Monday 13th of January we saw solar generation records fall in the Australian NEM with rooftop and utility scale PV providing a combined 21.5GW of power. For context, this means that solar was contributing to 65% of the total energy requirements for the NEM.

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