The government have killed off regional pricing

As you probably know, but also for the benefit of anyone else, there are different trading periods.

Futures market (months ahead) - based on expected demand, bids from generators (some may be offline due to maint etc), average weather conditions. From the average prices the CAP is calculated. This sets the price of the SVT and heavily influences the range of Fixed Price contracts for customers.

Day Ahead market - based on likely demand given weather forecasts, generators actually able to supply including wind and solar. If there is a shortfall then prices rise. If there is a big storm coming in the generators will bid low to stay in the game. This is where Octopus trade for their Agile product. The prices are fixed from 4pm of the day before up 22.30 the next day. It doesn’t matter if it goes pear shaped on the day, the prices are fixed. Tracker tariffs are derived from this as well.

Balancing Mechanism - BM (live) where there is a shortfall the NESO pay BM resources (this is a special contract to provide short notice supply) to come online to maintain the frequency, at sometimes outrageously high rates for short term cover (£2,000+ / MWh). The wind or solar power may not be as high, or the demand is higher than predicted 24 hours before hand. Otherwise the BM resources are paid as a hot spinning reserve in case of a generator going offline suddenly. If there is too much wind or solar or not enough demand at that moment some generators are paid to curtail their output**. The BM also has to take into account local demand/supply and transmission bottlenecks. As a result tens of thousands of (computer) BM instructions can be issued a day, all done by computer except for the 29th May this year when the computer went down and it all had to be done by by phone calls at an average rate of 17 per minute. All day.

There is a fourth stage when things go wrong called the Blame Game where everyone get together in a room, jump up and down, point fingers and shout at everyone else. Same as on the railway after a project.

Peter

** This is why it’s often cheaper to try and stimulate demand side with low/negative prices rather than paying the strike price plus curtailment rate. You might be thinking how do they know what to drop the price to, to stimulate demand but they already have a good idea from the past what the relationship is between price and demand is. It’s known as the price-demand curve just as there is a price-supply curve. Where those two curves intersect is the price where the supply meets the demand and it’s that price that gets set. The demand-price-supply mechanism is used in all three markets but with very different results.

Lets take the day ahead market is around around £80 per Mwh

According to the LCCC AR1 Allocation Round 1 there 27 onshore wind farms with the lowest CfD of around £91 per MWh. The highest in excess of £170 per MWh.

It is my understanding they receive the market price the LCCC (the consumer)  tops up the the to the CfD price. Or indeed if the CfD were below the day ahead market price. The LCCC would apply a levy. But as far as I can see on the LCCC data set there are no AR1 wind farms with a CfD below the current day ahead price.

You are quite correct to point out I had only shown the Balancing price. The period when the balancing price went in excess of £2000.00 MWh was due interconnectors out for maintenance and the predicted output not being achieved.

If you haven't seen this before Squeaky has a very good selection of quick reads in relation to electricity generation. It makes you realise how complex the whole system is.

https://www.squeaky.energy/blog

Peter 

For those of you who would like to explore energy generation and supply, Modo Energy have created a series of videos on YouTube on different topics. It’s a useful resource if you want to do a deeper dive into a particular subject like Battery Energy Supply Systems or Energy trading in the various markets. I’ve found it useful to clarify people’s statements on various topics and often find the that they oversimplified a situation of have it completely wrong.

https://www.youtube.com/@modoenergy