All Time High: How UK Power Prices Jumped to Record Levels


All Time High: How UK Power Prices Jumped to Record Levels

January 22, 2021

This winter has seen record prices for UK power and frequent alerts about supply shortages as the National Grid scrambles to avoid blackouts. All this despite the country still being under the same lockdown with restrictions that caused plunges in demand in spring and summer.

Here at Hartree Solutions, we’ve been following the market’s every move providing insights, analysis and warnings of upcoming supply shortages that ultimately led to some extraordinary prices and volatile swings.

Hartree scenario price forecast. The z-axis represents different fundamental inputs and associated price forecast

The day-ahead price of UK power surged to just under £1,500 on January 12th on the N2EX auction1, which is the highest price ever recorded. This comes against a backdrop of a winter in which the Grid has already been forced to issue six urgent calls for suppliers to provide extra capacity with much of winter still ahead of us.

We have long disagreed with the National Grid’s assumption5 of peak demand falling by 4% this winter and have expressed our concerns that the UK was more vulnerable to blackouts than their modelling suggested. Far from falling, peak winter demand this season first surpassed last year’s level on December 7th before climbing further to reach a fresh high earlier this month.

With the wind now making up a much larger proportion of the UK’s energy supply, at times of low wind the UK is much more vulnerable to periods of tight supply margin, something we have seen played out numerous times already this winter.

Generation by fuel type from National Grid data

In early November, we witnessed National Grid issue two notification of insignificant system margins on consecutive days. Yet even at the peak of this apparent supply crisis with wind contributing the lowest amount of power for 17 days, 12.5% of that wind was curtailed by the system operator. In fact, payments to constrain wind farms in November reached a new record, totalling over £49m and adding up to £220m for the year to date2.

This counterintuitive action is the function of a system that still favours price over carbon when deciding the order in which to acquire power supplies. That’s why we’re calling for the UK to widen its priorities and consider the carbon impacts when balancing the system.

Throughout that unusual period in November, we were providing blow-by-blow analysis of the developing picture (on Twitter), including the switching on of rarely used gas turbines, with our forecasts proving accurate. We also made some interesting observations as the UK entered its second lockdown.  Our granular analysis identified an unexpected 200MW demand bump at 10:27 pm on November 4th as people enjoyed ‘tea and toast’ after returning home from their last evening of freedom!

National Grid Demand Data

The market has already thrown up some wild price imbalances this year with Uniper’s Connahs Quay power station being paid £2,750 /MWh on January 8th, which temporarily set the highest imbalance price ever recorded. However, that record lasted a matter of minutes with EDF’s West Burton gas station being paid a scarcely believable £4,000 /MWh and setting the highest imbalance price ever seen. Yet just a couple of days before that Beatrice, a wind farm, paid £781 /MWh to turn off its generation.

Maximum monthly half-hour imbalance price. National Grid data

2021 has also seen the decoupling of the UK from European power auctions leaving two separate, independent UK day-ahead hourly auctions post-Brexit. These auctions have seen differences of £500 in their results even though they are just 40 minutes apart. The delta between the two, although not as extreme, has continued throughout January and we have been promoting the reimplementation of a single UK auction post-Brexit to spare consumers having to bear the added costs, risks and inefficiencies of having two unnecessary separate auctions.

Nord Pool N2EX UK1 Auction result and the EpexSpot UK3 Auction results

These extreme power prices have been limited to the UK while neighbouring interconnected markets have shown a limited reaction to the UK’s volatility. While Belgium, France and the Netherlands have been able to enjoy relatively benign prices this winter, the UK’s reliance on interconnector flows has left it more vulnerable to periods of cold weather and low wind generation.

EPEX3 Spot European day-ahead auction results

Gas has also endured a volatile few weeks with huge price spikes as cold snaps in Europe and Asia have coincided with LNG liquefaction facilities around the world being plagued by unplanned or extended outages. This has resulted in Asian utilities battling to buy any cargo they can lay their hands on, seemingly irrespective of price. JKM, Asia’s benchmark LNG contract, surged to its highest on record at $32.50/MMBtu while on the physical market, cargoes have been sold at high $30s.

ICE4 NBP and JKM front-month prices

This is in stark contrast to the situation we had in the summer when JKM was below $5/mmbtu. With Asia willing to pay so much for LNG, Europe has had to rely on storage withdrawals for such an elongated period that the very healthy storage levels at the start of winter are fast disappearing. Last week saw prices across Europe rocket amid fears of storage being almost empty, long before the end of the winter.

With so much volatility in the energy markets, Hartree Solutions’ trading expertise can not only protect your company but ensure you benefit in this unprecedented transition to net-zero. By building, owning and operating low-carbon assets, co-located with your business, we guarantee you cheaper, low carbon power with zero capital investment.

More Market Insights

1 Nord Pool N2EX
2 National Grid Monthly Balancing Services Summary
3 Epex Spot
5 National Grid Winter Outlook

written by
Adam Lewis

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AGP Sustainable Real Assets Pte Ltd (AGP) and Hartree Partners, LP (Hartree) today announce the launch of AMPYR Energy USA, the second joint venture between the two organizations in just over a year.

AMPYR Energy USA will be headquartered in New York and is targeting to build a 5GW utility-scale solar PV platform across multiple US markets. With experienced renewables development professionals on the ground, the newly-created company will continue to leverage AGP’s experience in developing large-scale renewable power projects globally, and Hartree’s cutting-edge power trading analytics and zero-carbon solutions.

“With the Federal and State goals for accelerating the energy transition, the US will be one of the fastest growing solar markets in the world and a core strategic priority in realizing AMPYR’s ambition of becoming one of the largest independent renewables developer and operator globally,” said Saurabh Beniwal, Partner at AGP and Board Chair for AMPYR USA.

Since its inception in February 2021, Hartree and AGP’s European solar venture, AMPYR Solar Europe (ASE), is making swift progress towards its goal of rolling out 5GW of large-scale solar projects to establish itself as one of the largest utility scale solar platforms in Europe. ASE also recently closed a €400 million facility to support this plan.

Following in the footsteps of ASE, expectations are equally high for AMPYR USA.

“We are excited to take another step forward with AGP into the US market,” said Stephen Semlitz, Managing Director of Hartree. “This new venture allows us to further demonstrate our decades of experience in finding investment solutions, consulting, and generating sustainable and commercially viable strategies for energy renewal and regeneration.”

To learn more about the new US venture visit:

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AMPYR Solar Europe Signs Deal with Edinburgh Airport to Develop Renewable Infrastructure

AMPYR Solar Europe (ASE), a pan-European solar developer, and Edinburgh Airport Limited today announce the…

AMPYR Solar Europe (ASE), a pan-European solar developer, and Edinburgh Airport Limited today announce the signing of a deal to develop a new solar farm linked with battery technology and electric vehicle charging infrastructure at Scotland’s busiest airport.

Under the agreement, ASE along with its local construction partner, Absolute Solar & Wind will build approximately 9MW of solar PV, 1.5MW of battery storage and 40 EV charging points. The large ground-mounted solar PV system and battery will be situated next to the runway on a 16-acre plot of land, connected to the airport via a high voltage private wire network.

The development will be a cornerstone of Edinburgh Airport’s goal to achieve Net-Zero by 2040 by generating clean, renewable energy that will cover about 30% of the airport’s total consumption.

“Our commitment to a net zero future is underpinned by the various strands of work we have going on across the airport as part of our Greater Good sustainability strategy and one of the most visible projects will be this solar farm,” said Gordon Dewar, Edinburgh Airport’s Chief Executive. “We are happy to confirm our partners in this exciting step and our collaboration will enable us to implement this technology and allow us and Scotland to benefit from it as soon as possible.”

The project is in the late stage of design, with construction planned to start this summer and be fully operational by the start of next year.

“We are really pleased to be partnering with Edinburgh Airport on this important step towards a net-zero future and in support of its impressive “Greater Good” sustainability strategy,” said Andrew Gould, Executive Chairman of ASE. “Edinburgh Airport’s leadership shows a way forward to zero carbon for the airport sector. This is the first of ASE’s five renewable energy projects in Scotland to reach the delivery stage: the commitment and support of the Scottish Government and its strong policy position on climate change is clearly attractive to international investment.”

Edinburgh Airport will purchase the power produced by the solar farm through a long-term Power Purchase Agreement with ASE. This PPA will generate long-term energy and carbon savings for the airport.

“We are delighted to support Edinburgh Airport with its ongoing drive to reduce its carbon impact,” said Matthew van Staden, Senior PPA Originator at Hartree Partners. “Through our expertise within Hartree and AMPYR Solar Europe, we can drive and deliver innovative energy solutions for companies within energy-intensive sectors. Our understanding of sustainable generation and commercially viable strategies in this space helped bring this project to life for Edinburgh Airport.”

The construction is further supported by the Scottish Government’s Low Carbon Infrastructure Transition Programme, which have provided a grant for a portion of the capital expenditure.

“We are proud to be delivering this pioneering project and helping to decarbonise Edinburgh Airport alongside our funding partners ASE and the Edinburgh Airport project team,” said Tom Newall,  Managing Director at Absolute Solar & Wind. “The co-location of utility scale battery storage and solar PV has enabled us to maximise the green energy generation on site whilst working with the grid connection constraints. We look forward to entering the construction phase before progressing to carry out the operation, maintenance and optimisation of the system, as it generates clean power for years to come, providing energy security for a major, Scottish transport hub.”


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