UK prompt power prices rose on Wednesday, posting strong gains for the second consecutive day, as forecasts of waning wind generation and shutdown of nuclear reactors tightened supply, one market source said.
The baseload day-ahead power price rose to GBP39.60/MWh on Wednesday, rising more than GBP2 in value above the previous close of GBP37.10/MWh, while the peakload price for Thursday delivery also jumped to GBP44.10/MWh, adding GBP3.60 on the day.
Prompt prices continued to rise as "supply is tightening," despite stable demand, one trader said, as the shutdown of four nuclear reactors in the UK curtailed supply.
According to National Grid data, surplus margins are set to tighten on Thursday to 10.4 GW, down nearly 1 GW from Wednesday's supply margin expectations of 11.3 GW.
Wind power output is expected to decline to 2.3 GW on Thursday, below peak wind estimates of 3.6 GW on Wednesday, National Grid data showed.
In addition, nuclear power generation fell to 5.6 GW at midday Wednesday, down from 6.4 GW recorded at midday Tuesday. Nuclear output in the previous weeks had generated around 7-8 GW of power but began to decline after EDF Energy announced on Monday its plans to shutdown four nuclear reactors after finding an unexpected result at its Heysham 1 station.
On Wednesday, EDF said that Heysham 1 unit 2 reactor was taken offline at approximately 08:00 am to begin a boiler inspection outage, a day after removing its Hartlepool unit 1 from the grid.
Further on the supply side, natural gas and coal gained market share in the UK's energy mix following declines in wind and nuclear, grid data showed.
CCGTs generated 14.8 GW of electricity, or 42.1%, at midday Wednesday, up from 13.7 GW around the same time Tuesday, while coal-fired power plants rose to 6.4 GW, or 18.2%, from 5.1 GW at midday Tuesday, according to National Grid data.
