Another depressing essay on the economic and scientific madness and ineptitude of our politicians. The public would be aghast if they knew but the relentless propaganda makes it very difficult for reason and reality to prevail (or even get a voice). My Iron Law of Govt strikes again.... Everything they do is net negative for Society at large. Their interjections into the market always deliver diametrically opposite outcomes from those they claim to want. Always.
You ask "In what world does it make economic sense for consumers to pay elevated subsidies to generate wind and solar power, and then pay people overseas to take the same power off our hands?" Answer - in the world of eco-zealots and grifters and incompetent politicians.
When the energy system collapses (as it surely will) not one of these politicians, NGOs, or corporations will apologise. Not one. If you don't believe me just look at the Post Office scandal unfolding right now.
Problem is the other parties are even more obsessed than this lot. Its going to need a power crunch and forced blackouts to get any attention i fear but so be it.
Thanks David. Another detailed, mind-blowing expose of yet another aspect of the Net Zero scam, highlighting the progressive destruction of our previously robust, secure and remarkably efficient energy infrastructure via the treasonous and insane actions of our politicians. I hope Toby Young picks up on this article and publishes it in the Daily Sceptic to ensure wider coverage, but it really deserves to be in the main stream media via the Telegraph and Daily Mail. It is vital that the general public are made fully aware of this scam.
They knew this back in 2005, long before these interconnectors were built.
Denmark had loads of wind power, but no storage. So it sold energy to Scandinavia, which is blessed with hydro. Scandinavia could hoard their hydro by using Danish wind, and then sell hydro back to Denmark when there was no wind.
A great trade? Not really, because Denmark was selling cheap (it could do nothing with the surplus energy), and buying expensive. So Scandinavia was laughing all the way to the bank.
This again highlights the need for more stored backup. The UK needs a minimum of 20,000 gwh of stored backup, but we only have 10 gwh (Dinorwig). The Royal Society said we may need 100,000 gwh.
Wind and solar need stored backup energy to work, but this will double or triple the cost of renewables. They cannot claim renewables are cheap, without including all the costs. The present ‘low cost’ of renewables is due to them living parasitically off gas and coal as the backup sources. Include the extra cost of building 700 new Dinorwig power stations, before saying renewables are cheap.
No, we need a gas & coal fired transition to a completely nuclear powered future - wind & solar are just elitist cash cows, they are engineeringly incompetent for national grids - the storage you reference is both unaffordable & unsourceable (bear in mind you’d also have to replace great swathes of it, cyclically at life end, on top of installing new additional)
Absolutely pumped storage is mission critical not expensive Chinese batteries. There are several hydro schemes ready to go like Coire Glas (30GWh@1.5GW) which should be declared National Infrastructure and be fast tracked if we are serious about net zero (im not but the momentum is in that direction so at least build a system that is going to work 24/7/365).
The Royal Society said we should use hydrogen storage, because we don't have enough suitable hills. Trouble is, a hydrogen battery loses 70% of its energy in the system. So now you need more wind turbines, to make up the shortfall.
In contrast, Prof MacKay (government science minister) said we should use low profile pumped storage. ie: we should flood all the Welsh Valleys and Scottish Glens, to use as pumped storage. But I think the Welsh and Scots may have something to say about that...
I think MacKay was quite keen on nuclear too, recognising that we would never have enough pumped storage to cover the intermittency of renewables. The RS report was useful in that it highlighted the sheer scale of storage required, even though they underestimated it because they didn't factor in inter-annual changes in demand.
In his final interview a few days before he died he called renewables a delusion for the UK. He was a mainly passive reader of Euan Mearns' Energy Matters, though occasionally he popped his head over the parapet with a comment. I think the work done mainly by Roger Andrews and the discussions there convinced him that renewables are not a viable way forward.
At the time of the Ferrybridge demolition (Aug 2021), Sharma said coal supplied less than 2% of UK electricity. In freezing, dark, windless December 2023 coal still managed to supply 2% of UK electricity to help keep the lights on (alongside gas and interconnector supplies), as recorded by Jaime Jessop: https://jaimejessop.substack.com/p/cold-weather-in-britain-lays-bare.
Ratcliffe has all three units online this morning as it did yesterday and thats with 9GW of wind as well. I entirely agree that the destruction of the coal fired stations before the boilers were cold is an act against the state in my book. Even the Germans mothballed their stations and have been able to bring a few back online following the Ukraine debacle. What absolutely must not happen is the CCGTs are treated the same as they become less used. They need to be protected as national infrastructure and that will cost money but there is NO choice we don't have enough despatchable generation otherwise for low wind dark nights.
Doug, yes, a Dunkelflaute in the UK probably means a Dunkelflaute in northern Europe, even as far away as Denmark, which means that dispatchable generation is going to be very tight across the continent, which means that any 'clean' (lol) energy we import through the interconnectors is going to be high cost, but more importantly, of very limited quantity and may even be insufficient to balance local demand if high pressure hangs around long enough.
Indeed look at the system peaks last week very little i/c importing was going on nor was there much exporting as we were pretty maxed out on CCGTs other than the old OCGT sets that are still available at the "coal fired" power station sites (installed for black start ironically). We have two nukes off for regulatory maintenance currently isn't helping but given we wont have them much longer gives us a good test of what the future looks like.
The UK must embark on a coal / gas transition to a completely nuclear powered future - it is the only sensible, affordable solution to our energy crisis (net zero is a solution to a problem that doesn’t exist)
Another example of why there should be a separation of business and state. Any business that pays a consumer to take his product is an organization pretending to "run a business". Like the consumerist addiction to all things "free" (free shipping!, same day delivery!, 60% off promo code!, get your's before they're gone!, everyone is raving about these!, ...) business has become another street addict to governments handing out OPM (other people's money). Which, like opium, is very addictive. And also like opium, has been used by governments for centuries to subvert autonomy, independence and self determination.
The cap and trade, carbon tax boondoggle is bankrupting the west, and the CCP (and other less notable, less scrupulous state actors), have "capitalized" on it.
Having downloaded the data for 2023 I found to my surprise that they include all the transmission connected generation as well except solar, and pumped storage pumping. Perhaps they will get around to including embedded generation and batteries charging and discharging sometime. The round trip efficiency for pumped storage is 76.3%. There are however a few data glitches with zero or plainly wrong low numbers - I found 21 settlement periods in 2023 with problem data, and 2 missing altogether.
With those caveats I found that apparent demand (generation plus net imports less pumping) averaged £99.77/MWh valued at hourly IMRP day ahead prices, with Biomass garnering £100.58/MWh, CCGT £105.91, coal £114.81, hydro £104.28, nuclear £93.47, OCGT £130.41, oil £77.73, "Other" £104.94 and wind £90.26 on the same basis. Pumped storage made a gross margin of £54m on 175GWh of power redelivered.
I have done calculations by interconnector and country on total import and export and average value at IMRP valuation, and also average utilisation of each link assuming no downtime. Overall, we imported 33.5TWh at £98.70/MWh and exported 10.1TWh at £84.16/MWh. Average utilisation is 59% (excluding Viking Link which has only just started up). Some of that lowish figure is the result of actual and surrogate export bans by Ireland and Norway.
Of course, balancing trades by NGESO are even less advantageous, as you have shown.
I see today the Irish are being asked to pay top prices to keep their lights on. In fact, the Irish lose out more than we do, because they also have to dump their wind surpluses at fire sale prices. They use the UK as their balancing mechanism.
Last week for a few hours one evening, the electricity in our street was switched off due to gas workers uncovering an old electric pot end that was not so insulating. This is in the South of the UK and it was about 3 degrees outside. Candles out, gas stoves on, maybe go for a drive to somewhere with electricity. I also grew up with blackouts from time to time in Belfast as well so I knew the deal. Although those blackouts often involved a bomb. So this was much quieter.
It wasn’t a huge hardship but it also wasn’t without annoyance and having to adapt. If this was to be a regular occurrence life would be different.
The media would also blame the big “greedy” energy companies without even scratching the surface to see it has been a decades long failure of energy infrastructure planning driven largely by the cancerous belief in MMGW.
A belief that by its own standards if applied to say Boeing 737 MAX 9’s would have not stopped flying them irrespective of flying doors. And would have forced more people to fly on such planes or even worse paid for empty planes to fly around at 10 times the cost.
As i understand these are used by traders/suppliers to transport energy they need to supply so they have to pay the i/c owner a fee to shift xMW at half hourly slices. The i/c operator auctions the capacity in quite a convoluted way but I wonder if the prices you've used on your analysis reflects the various charges is why it perhaps goes negative. Mind you can't see what the incentive is on a trader to do this but the ESO may take a view that bleeding off excess power is cheaper than getting a windmill to switch off and have to be replaced by more expensing CCGT? I don't know but we haven't half made it over complex which gives people to exploit the system as well as it having unknown knowns' that may will bite us up the proverbial when we least expect it.
Interconnector trades depend on a price differential between each end. Price differences reflect the local supply/demand realities, and can be negative at one end - or even both ends as happened last year when the Grid paid Dutch solar farms up to £500/MWh to curtail and cut flows on BritNed.
I’m sure the main attraction of interconnectors to our politicians is that the imported electricity goes on the UK books as “emissions free”. It’s all part of their ruinous game of deindustrialising, forcing UK industry offshore to save CO2 emissions which then go onto the books of the rest of the world when we import the offshored goods and products instead of producing them ourselves, generating even higher global net CO2 emissions in the process, not that such emissions matter in the slightest. China, India, the Far East et al are more than happy to take our business and clearly have no intention of following suit with the West in committing Net Zero economic suicide: https://twitter.com/latimeralder/status/1738826623242174670?t=5zlMlAXXNuqLvRO2541aTg&s=19.
The recent announcements on the pending closure of Grangemouth oil refining and the running down of Port Talbot blast furnaces are further indications that things will only get worse. The “smoke and mirrors” trumpeted halving of UK CO2 emissions to date is an industrial and human tragedy which has achieved no useful purpose (certainly not as far as the global climate is concerned) and is definitely not something to brag about. Yet still the Uniparty insists on pressing ahead with the utterly impossible UN IPCC's intermediate target of 45% global CO2 emission cuts from 2010 levels by 2030, towards utterly unaffordable and unattainable Net Zero by 2050: https://notalotofpeopleknowthat.wordpress.com/2023/10/13/michael-kelly-the-green-energy-net-zero-plan-will-require-a-command-economy/
It is of course a complete absurdity that when Zac Goldsmith and his Greenpeace chums climbed chimneys at Kingsnorth in protest at plans for a coal fired Kingsnorth D the result was that Kingsnorth was connected to Maasvlakte via the BritNed interconnector where they built the new MPP3 coal fired power station right next door to the HVDC station. Lots of extra cost for UK consumers, and less security of supply. Almost certainly more emissions than had the plant proceeded.
It did of course fit in with EU plans to try to make the UK dependent on the Continent, and it was no surprise when they ejected the UK from the Market Coupling mechanism that is supposed to ensure optimised use of interconnectors as part of Brexit. That has resulted in power flows in opposite directions at the same time on IFA1 and Eleclink that both terminate near the Channel Tunnel exit in France and Sellindge in Kent.
ISTR reading 15 to 20 years ago a similar analysis of the Danish wind system.... in high wind times they paid Nordpool (?) to take surplus electricity off their hands (and largely Norway saved hydro water), but in low wind times they paid top dollar for Norway to release more hydro downhill. Wind wasn’t displacing much coal generation and reducing CO2 emissions either.
The interconnector data you have used only relates to trades conducted by NGESO largely for balancing purposes, though I think it excludes emergency balancing mechanism actions such as when they paid nearly £10,000/MWh to the Belgians via NEMO, in reality to maintain contracted exports to France, while claiming it was to keep the lights on in London. It only accounts for a fraction of the overall interconnector trade.
Arrangements do vary by interconnector, but some allow capacity to be reserved ahead of time subject to use it or lose it rules which allows electricity traders with presence at both ends to lock in arbitrage profits in futures and forward markets (which will also entail a forex hedge). Interconnectors net off forward and reverse flow transactions so that the physical flow is in one direction on each interconnector. Contracts to buy and sell power at each end of the interconnector are put into general clearing (in the UK case via Exelon), so if there is bidirectional trade there is no attribution of particular trades with the actual flow. As gate closure approaches it may be more profitable for a trader to reverse a previous transaction if it turns out that the relative prices between markets flip. This is the main reason why there is bidirectional trade for the same period on the same interconnector, and the profit incentive encourages arbitrage trade, at least until the interconnectorcapacity us fully take, at which point no further arbitrage can occur and market prices at either end can diverge substantially, rather than being constrained by the cost of using the interconnector (loss and use fees) and arbitrage. If an interconnector looks to be fully committed, transit payment costs rise to swallow some of the arbitrage profit for the additional benefit of the interconnector business.
National Grid's trade motivations on interconnectors are often to do with getting a less constrained transmission pattern within the UK, which is not visible to the market at large because we don't have zonal/locational pricing. Sometimes it takes the form of emergency balancing actions. Of course if we had generating capacity in the right locations such trade would be unnecessary.
Presumably a big chunk of the energy flows across the grid are between two trading parties on whatever terms they have agreed which rarely get disclosed and all we see in BM is the costs related to managing the grid. Mind you i have also seen that some windmills with PPAs have the price related to a specific index rather than a fixed price as they clearly believe they can make more this way. All in all pricing is a lot more complex than it was when CEGB ran it!
OFGEM gets to see the costs that retailers pay for their supply: that of course doesn't reveal the profits made by traders along the way - banks at times make big money out of providing hedging programmes which end up on our bills. Many generators are held by special purpose companies, whose accounts can be downloaded from Companies House. Together with information on how much they generated, and on other sources of income (such as Capacity Market payments, ROCs, curtailment payments, CFD payments, and also the outcome of hedging programmes which may be for financing costs or commodity hedges) it is possible to see roughly what average price they secured. HMRC rules on arms' length prices for intra group sales tend to mean that they have to follow a market basis that HMRC is happy with from a tax perspective.
Wind farms tend to price based on day ahead prices: that is the basis for CFDs anyway. Until the generation forecast is reasonably reliable it is a big risk to commit to trade ahead of time. If the wind fails, then they will be faced with buying back their previous sales at prevailing market prices, which are likely to be higher in the absence of wind, locking in trading losses. Worse still is being caught paying system imbalance prices in the Balancing Mechanism - they can be much more punitive.
Gas and coal can trade forward by buying fuel in forward markets and selling the power they would produce to lock in a margin. If it turns out that the generation is not needed, the market will make it profitable to unwind the transaction by buying in power and reselling the fuel (for coal that means buying less replenishment stock, though gas trade is better matched for time). There is still risk if there is an unexpected plant outage, when forward sales will have to be bought back regardless.
Nuclear has tended to sell whenever the market price offered a good margin. However, the market volatility and increased frequency of outages in recent times has exposed them to some massive outage risk, so they have been less keen to sell forward. Currently we seem to have half the remaining capacity offline. Probably fortunate that prices remain towards the lower end of the range - and indeed, that may have motivated some shutdowns: simply take profit on earlier sales at higher prices to help fund the maintenance.
I’m from the US so don’t know details about how the UK system works. Is it cheaper for the grid to purchase excess wind power for low or negative price and resell for a slightly negative price than to pay wind farms to curtail.
It's a common misconception that the Grid buys all the electricity. In fact, most of it trades ahead of gate closure in bilateral contracts between generators, traders (including banks etc.) and retailers. The Grid publishes its forecasts for demand, wind and solar generation, and system balance and supply margin taking account of the contracts registered at the clearing house. These help inform the market to trade towards a closer supply/demand balance.
However, after gate closure the Grid becomes the central counterparty in the Balancing Mechanism, for which generators supply prices at which they would increase or decrease generation. The Grid then adjusts dispatch using these bids and offers and in the light of actual performance and Grid constraints. In extremis if they find that insufficient they actively seek additional correction which can be costly. They may have to resort to SO-SO trades to shift the problem abroad.
Note that the systems of heavy subsidy and taxes applied to generators heavily distort the market. The result is that the costliest sources of power from the consumer angle are almost guaranteed a sale of anything they can produce, while the cheapest get shut in by taxes unless market prices are high enough. Moreover it encourages very inefficient use of coal which is called to warm to meet peak demand rather than being run as baseload. In effect we have a reverse merit order.
Another depressing essay on the economic and scientific madness and ineptitude of our politicians. The public would be aghast if they knew but the relentless propaganda makes it very difficult for reason and reality to prevail (or even get a voice). My Iron Law of Govt strikes again.... Everything they do is net negative for Society at large. Their interjections into the market always deliver diametrically opposite outcomes from those they claim to want. Always.
You ask "In what world does it make economic sense for consumers to pay elevated subsidies to generate wind and solar power, and then pay people overseas to take the same power off our hands?" Answer - in the world of eco-zealots and grifters and incompetent politicians.
When the energy system collapses (as it surely will) not one of these politicians, NGOs, or corporations will apologise. Not one. If you don't believe me just look at the Post Office scandal unfolding right now.
Problem is the other parties are even more obsessed than this lot. Its going to need a power crunch and forced blackouts to get any attention i fear but so be it.
Agreed, a good bout of snow & ice ought to do it
Thanks David. Another detailed, mind-blowing expose of yet another aspect of the Net Zero scam, highlighting the progressive destruction of our previously robust, secure and remarkably efficient energy infrastructure via the treasonous and insane actions of our politicians. I hope Toby Young picks up on this article and publishes it in the Daily Sceptic to ensure wider coverage, but it really deserves to be in the main stream media via the Telegraph and Daily Mail. It is vital that the general public are made fully aware of this scam.
Needs a TV programme David Turner vs Environmental Evangelists
They knew this back in 2005, long before these interconnectors were built.
Denmark had loads of wind power, but no storage. So it sold energy to Scandinavia, which is blessed with hydro. Scandinavia could hoard their hydro by using Danish wind, and then sell hydro back to Denmark when there was no wind.
A great trade? Not really, because Denmark was selling cheap (it could do nothing with the surplus energy), and buying expensive. So Scandinavia was laughing all the way to the bank.
Why Wind Works For Denmark.
https://docs.wind-watch.org/sharman-winddenmark.pdf
This again highlights the need for more stored backup. The UK needs a minimum of 20,000 gwh of stored backup, but we only have 10 gwh (Dinorwig). The Royal Society said we may need 100,000 gwh.
Wind and solar need stored backup energy to work, but this will double or triple the cost of renewables. They cannot claim renewables are cheap, without including all the costs. The present ‘low cost’ of renewables is due to them living parasitically off gas and coal as the backup sources. Include the extra cost of building 700 new Dinorwig power stations, before saying renewables are cheap.
Ralph
No, we need a gas & coal fired transition to a completely nuclear powered future - wind & solar are just elitist cash cows, they are engineeringly incompetent for national grids - the storage you reference is both unaffordable & unsourceable (bear in mind you’d also have to replace great swathes of it, cyclically at life end, on top of installing new additional)
Absolutely pumped storage is mission critical not expensive Chinese batteries. There are several hydro schemes ready to go like Coire Glas (30GWh@1.5GW) which should be declared National Infrastructure and be fast tracked if we are serious about net zero (im not but the momentum is in that direction so at least build a system that is going to work 24/7/365).
The Royal Society said we should use hydrogen storage, because we don't have enough suitable hills. Trouble is, a hydrogen battery loses 70% of its energy in the system. So now you need more wind turbines, to make up the shortfall.
In contrast, Prof MacKay (government science minister) said we should use low profile pumped storage. ie: we should flood all the Welsh Valleys and Scottish Glens, to use as pumped storage. But I think the Welsh and Scots may have something to say about that...
R
I think MacKay was quite keen on nuclear too, recognising that we would never have enough pumped storage to cover the intermittency of renewables. The RS report was useful in that it highlighted the sheer scale of storage required, even though they underestimated it because they didn't factor in inter-annual changes in demand.
In his final interview a few days before he died he called renewables a delusion for the UK. He was a mainly passive reader of Euan Mearns' Energy Matters, though occasionally he popped his head over the parapet with a comment. I think the work done mainly by Roger Andrews and the discussions there convinced him that renewables are not a viable way forward.
Yes, but only because he could not make renewables work without it. And he never solved the stored backup problem.
See his ‘Sustainable Energy Without Hot Air’.
http://www.withouthotair.com
R
New Pumped Hydro not working out to well in Australia:
Time to Cancel Snowy Hydro 2.0 - YouTube cost explodes from $3.8 billion to $12B + $5B transmission, to $24B total. Malcom Roberts:
https://www.youtube.com/watch?v=RF5uhmWgJJw
https://theconversation.com/snowy-2-0-will-not-produce-nearly-as-much-electricity-as-claimed-we-must-hit-the-pause-button-125017
Further to the idiot Alok Sharma blowing up Ferrybridge, here is the idiot Nicola Sturgeon six months later blowing up Longannet: https://www.sundaypost.com/fp/longannet-chimney-demolition/.
At the time of the Ferrybridge demolition (Aug 2021), Sharma said coal supplied less than 2% of UK electricity. In freezing, dark, windless December 2023 coal still managed to supply 2% of UK electricity to help keep the lights on (alongside gas and interconnector supplies), as recorded by Jaime Jessop: https://jaimejessop.substack.com/p/cold-weather-in-britain-lays-bare.
Ratcliffe has all three units online this morning as it did yesterday and thats with 9GW of wind as well. I entirely agree that the destruction of the coal fired stations before the boilers were cold is an act against the state in my book. Even the Germans mothballed their stations and have been able to bring a few back online following the Ukraine debacle. What absolutely must not happen is the CCGTs are treated the same as they become less used. They need to be protected as national infrastructure and that will cost money but there is NO choice we don't have enough despatchable generation otherwise for low wind dark nights.
Doug, yes, a Dunkelflaute in the UK probably means a Dunkelflaute in northern Europe, even as far away as Denmark, which means that dispatchable generation is going to be very tight across the continent, which means that any 'clean' (lol) energy we import through the interconnectors is going to be high cost, but more importantly, of very limited quantity and may even be insufficient to balance local demand if high pressure hangs around long enough.
Indeed look at the system peaks last week very little i/c importing was going on nor was there much exporting as we were pretty maxed out on CCGTs other than the old OCGT sets that are still available at the "coal fired" power station sites (installed for black start ironically). We have two nukes off for regulatory maintenance currently isn't helping but given we wont have them much longer gives us a good test of what the future looks like.
The UK must embark on a coal / gas transition to a completely nuclear powered future - it is the only sensible, affordable solution to our energy crisis (net zero is a solution to a problem that doesn’t exist)
Another example of why there should be a separation of business and state. Any business that pays a consumer to take his product is an organization pretending to "run a business". Like the consumerist addiction to all things "free" (free shipping!, same day delivery!, 60% off promo code!, get your's before they're gone!, everyone is raving about these!, ...) business has become another street addict to governments handing out OPM (other people's money). Which, like opium, is very addictive. And also like opium, has been used by governments for centuries to subvert autonomy, independence and self determination.
The cap and trade, carbon tax boondoggle is bankrupting the west, and the CCP (and other less notable, less scrupulous state actors), have "capitalized" on it.
Wow. This is really good analysis. Great job.
Another great analysis David, with further great insight from comments -
Interconnector metered flows at 5 minute (and 30 minute) resolution are available here
https://bmrs.elexon.co.uk/interconnector-flows
Having downloaded the data for 2023 I found to my surprise that they include all the transmission connected generation as well except solar, and pumped storage pumping. Perhaps they will get around to including embedded generation and batteries charging and discharging sometime. The round trip efficiency for pumped storage is 76.3%. There are however a few data glitches with zero or plainly wrong low numbers - I found 21 settlement periods in 2023 with problem data, and 2 missing altogether.
With those caveats I found that apparent demand (generation plus net imports less pumping) averaged £99.77/MWh valued at hourly IMRP day ahead prices, with Biomass garnering £100.58/MWh, CCGT £105.91, coal £114.81, hydro £104.28, nuclear £93.47, OCGT £130.41, oil £77.73, "Other" £104.94 and wind £90.26 on the same basis. Pumped storage made a gross margin of £54m on 175GWh of power redelivered.
I have done calculations by interconnector and country on total import and export and average value at IMRP valuation, and also average utilisation of each link assuming no downtime. Overall, we imported 33.5TWh at £98.70/MWh and exported 10.1TWh at £84.16/MWh. Average utilisation is 59% (excluding Viking Link which has only just started up). Some of that lowish figure is the result of actual and surrogate export bans by Ireland and Norway.
Of course, balancing trades by NGESO are even less advantageous, as you have shown.
SOSO interconnector trade details are available here
https://bmrs.elexon.co.uk/soso-trade-prices
I see today the Irish are being asked to pay top prices to keep their lights on. In fact, the Irish lose out more than we do, because they also have to dump their wind surpluses at fire sale prices. They use the UK as their balancing mechanism.
Last week for a few hours one evening, the electricity in our street was switched off due to gas workers uncovering an old electric pot end that was not so insulating. This is in the South of the UK and it was about 3 degrees outside. Candles out, gas stoves on, maybe go for a drive to somewhere with electricity. I also grew up with blackouts from time to time in Belfast as well so I knew the deal. Although those blackouts often involved a bomb. So this was much quieter.
It wasn’t a huge hardship but it also wasn’t without annoyance and having to adapt. If this was to be a regular occurrence life would be different.
The media would also blame the big “greedy” energy companies without even scratching the surface to see it has been a decades long failure of energy infrastructure planning driven largely by the cancerous belief in MMGW.
A belief that by its own standards if applied to say Boeing 737 MAX 9’s would have not stopped flying them irrespective of flying doors. And would have forced more people to fly on such planes or even worse paid for empty planes to fly around at 10 times the cost.
As i understand these are used by traders/suppliers to transport energy they need to supply so they have to pay the i/c owner a fee to shift xMW at half hourly slices. The i/c operator auctions the capacity in quite a convoluted way but I wonder if the prices you've used on your analysis reflects the various charges is why it perhaps goes negative. Mind you can't see what the incentive is on a trader to do this but the ESO may take a view that bleeding off excess power is cheaper than getting a windmill to switch off and have to be replaced by more expensing CCGT? I don't know but we haven't half made it over complex which gives people to exploit the system as well as it having unknown knowns' that may will bite us up the proverbial when we least expect it.
Interconnector trades depend on a price differential between each end. Price differences reflect the local supply/demand realities, and can be negative at one end - or even both ends as happened last year when the Grid paid Dutch solar farms up to £500/MWh to curtail and cut flows on BritNed.
I’m sure the main attraction of interconnectors to our politicians is that the imported electricity goes on the UK books as “emissions free”. It’s all part of their ruinous game of deindustrialising, forcing UK industry offshore to save CO2 emissions which then go onto the books of the rest of the world when we import the offshored goods and products instead of producing them ourselves, generating even higher global net CO2 emissions in the process, not that such emissions matter in the slightest. China, India, the Far East et al are more than happy to take our business and clearly have no intention of following suit with the West in committing Net Zero economic suicide: https://twitter.com/latimeralder/status/1738826623242174670?t=5zlMlAXXNuqLvRO2541aTg&s=19.
The recent announcements on the pending closure of Grangemouth oil refining and the running down of Port Talbot blast furnaces are further indications that things will only get worse. The “smoke and mirrors” trumpeted halving of UK CO2 emissions to date is an industrial and human tragedy which has achieved no useful purpose (certainly not as far as the global climate is concerned) and is definitely not something to brag about. Yet still the Uniparty insists on pressing ahead with the utterly impossible UN IPCC's intermediate target of 45% global CO2 emission cuts from 2010 levels by 2030, towards utterly unaffordable and unattainable Net Zero by 2050: https://notalotofpeopleknowthat.wordpress.com/2023/10/13/michael-kelly-the-green-energy-net-zero-plan-will-require-a-command-economy/
It is of course a complete absurdity that when Zac Goldsmith and his Greenpeace chums climbed chimneys at Kingsnorth in protest at plans for a coal fired Kingsnorth D the result was that Kingsnorth was connected to Maasvlakte via the BritNed interconnector where they built the new MPP3 coal fired power station right next door to the HVDC station. Lots of extra cost for UK consumers, and less security of supply. Almost certainly more emissions than had the plant proceeded.
It did of course fit in with EU plans to try to make the UK dependent on the Continent, and it was no surprise when they ejected the UK from the Market Coupling mechanism that is supposed to ensure optimised use of interconnectors as part of Brexit. That has resulted in power flows in opposite directions at the same time on IFA1 and Eleclink that both terminate near the Channel Tunnel exit in France and Sellindge in Kent.
ISTR reading 15 to 20 years ago a similar analysis of the Danish wind system.... in high wind times they paid Nordpool (?) to take surplus electricity off their hands (and largely Norway saved hydro water), but in low wind times they paid top dollar for Norway to release more hydro downhill. Wind wasn’t displacing much coal generation and reducing CO2 emissions either.
For excellent analysis of the Danish (and wider Nordic/EU) situation going back many years it is worth rummaging at PF Bach's site
https://pfbach.dk
He has done many astute analyses and also has a repository of useful data, including European interconnector flows over many years.
The interconnector data you have used only relates to trades conducted by NGESO largely for balancing purposes, though I think it excludes emergency balancing mechanism actions such as when they paid nearly £10,000/MWh to the Belgians via NEMO, in reality to maintain contracted exports to France, while claiming it was to keep the lights on in London. It only accounts for a fraction of the overall interconnector trade.
Arrangements do vary by interconnector, but some allow capacity to be reserved ahead of time subject to use it or lose it rules which allows electricity traders with presence at both ends to lock in arbitrage profits in futures and forward markets (which will also entail a forex hedge). Interconnectors net off forward and reverse flow transactions so that the physical flow is in one direction on each interconnector. Contracts to buy and sell power at each end of the interconnector are put into general clearing (in the UK case via Exelon), so if there is bidirectional trade there is no attribution of particular trades with the actual flow. As gate closure approaches it may be more profitable for a trader to reverse a previous transaction if it turns out that the relative prices between markets flip. This is the main reason why there is bidirectional trade for the same period on the same interconnector, and the profit incentive encourages arbitrage trade, at least until the interconnectorcapacity us fully take, at which point no further arbitrage can occur and market prices at either end can diverge substantially, rather than being constrained by the cost of using the interconnector (loss and use fees) and arbitrage. If an interconnector looks to be fully committed, transit payment costs rise to swallow some of the arbitrage profit for the additional benefit of the interconnector business.
National Grid's trade motivations on interconnectors are often to do with getting a less constrained transmission pattern within the UK, which is not visible to the market at large because we don't have zonal/locational pricing. Sometimes it takes the form of emergency balancing actions. Of course if we had generating capacity in the right locations such trade would be unnecessary.
Presumably a big chunk of the energy flows across the grid are between two trading parties on whatever terms they have agreed which rarely get disclosed and all we see in BM is the costs related to managing the grid. Mind you i have also seen that some windmills with PPAs have the price related to a specific index rather than a fixed price as they clearly believe they can make more this way. All in all pricing is a lot more complex than it was when CEGB ran it!
OFGEM gets to see the costs that retailers pay for their supply: that of course doesn't reveal the profits made by traders along the way - banks at times make big money out of providing hedging programmes which end up on our bills. Many generators are held by special purpose companies, whose accounts can be downloaded from Companies House. Together with information on how much they generated, and on other sources of income (such as Capacity Market payments, ROCs, curtailment payments, CFD payments, and also the outcome of hedging programmes which may be for financing costs or commodity hedges) it is possible to see roughly what average price they secured. HMRC rules on arms' length prices for intra group sales tend to mean that they have to follow a market basis that HMRC is happy with from a tax perspective.
Wind farms tend to price based on day ahead prices: that is the basis for CFDs anyway. Until the generation forecast is reasonably reliable it is a big risk to commit to trade ahead of time. If the wind fails, then they will be faced with buying back their previous sales at prevailing market prices, which are likely to be higher in the absence of wind, locking in trading losses. Worse still is being caught paying system imbalance prices in the Balancing Mechanism - they can be much more punitive.
Gas and coal can trade forward by buying fuel in forward markets and selling the power they would produce to lock in a margin. If it turns out that the generation is not needed, the market will make it profitable to unwind the transaction by buying in power and reselling the fuel (for coal that means buying less replenishment stock, though gas trade is better matched for time). There is still risk if there is an unexpected plant outage, when forward sales will have to be bought back regardless.
Nuclear has tended to sell whenever the market price offered a good margin. However, the market volatility and increased frequency of outages in recent times has exposed them to some massive outage risk, so they have been less keen to sell forward. Currently we seem to have half the remaining capacity offline. Probably fortunate that prices remain towards the lower end of the range - and indeed, that may have motivated some shutdowns: simply take profit on earlier sales at higher prices to help fund the maintenance.
I’m from the US so don’t know details about how the UK system works. Is it cheaper for the grid to purchase excess wind power for low or negative price and resell for a slightly negative price than to pay wind farms to curtail.
It's a common misconception that the Grid buys all the electricity. In fact, most of it trades ahead of gate closure in bilateral contracts between generators, traders (including banks etc.) and retailers. The Grid publishes its forecasts for demand, wind and solar generation, and system balance and supply margin taking account of the contracts registered at the clearing house. These help inform the market to trade towards a closer supply/demand balance.
However, after gate closure the Grid becomes the central counterparty in the Balancing Mechanism, for which generators supply prices at which they would increase or decrease generation. The Grid then adjusts dispatch using these bids and offers and in the light of actual performance and Grid constraints. In extremis if they find that insufficient they actively seek additional correction which can be costly. They may have to resort to SO-SO trades to shift the problem abroad.
Note that the systems of heavy subsidy and taxes applied to generators heavily distort the market. The result is that the costliest sources of power from the consumer angle are almost guaranteed a sale of anything they can produce, while the cheapest get shut in by taxes unless market prices are high enough. Moreover it encourages very inefficient use of coal which is called to warm to meet peak demand rather than being run as baseload. In effect we have a reverse merit order.