Hartree Solutions Power Forecast – Low Winds Create a Potential UK Price Storm


Hartree Solutions Power Forecast – Low Winds Create a Potential UK Price Storm

August 24, 2020

Since last week, as the weather forecast has become more certain, Hartree Solutions’ in-house models have been identifying potentially high system prices for today’s evening peak. This is, for the most part, a result of total unconstrained wind ramping down from a peak of 16GW to an expected forecast of 1.5GW.

Total Unconstrained Wind Generation – Hartree modelling

This observed tightness was evident in the Day-Ahead auction results as it cleared at the highest level since 3rd Dec 2019 with a baseload price of £48.86/MWh and Block 5 (the four hours starting from 3 PM) at £71/MWh. This potential system tightness can be observed in our scenario analysis as generated prior to the Day-Ahead auctions as shown below:

Price Scenario Analysis – Hartree modelling

As wind turbines slow over the day, the requirement for thermal generation increases. We forecast almost all the available gas fleet to run, with station utilisation at 92%.

Gas Generation as a factor of Available Generation – Hartree modelling

With the UK fully importing from France, Belgium & Netherlands via interconnectors, the remaining demand peak leaves little to no flexibility for the market and ultimately National Grid to balance the UK without looking further up the merit order to incentivise coal station running.

For this evening’s peak, the two key drivers of price action will be wind outturn relative to forecasts and spare thermal capacity which currently sits at just over 3GW. With the risk of power plants tripping, leaving them unable to generate, this margin could reduce even further. If either wind generation delivers lower than forecast or there are unscheduled power plant outages, then the market will be susceptible to high system prices as the balancing mechanism makes up this shortfall. Conversely, if wind generation remains higher than forecast for longer, then we will see National Grid bidding off plants in the Balancing Mechanism, suppressing system prices to some of the more mundane outturns shown in our scenario analysis.

There is further potential for a higher price response when we take into account the details of the imbalance pricing mechanism in the UK. If the low system margin remains then a pricing mechanism can come in to play, the Loss of Load Probability (LoLP), that reflects the probability of a shortfall of power generation to meet demand and thus blackouts. When National Grid activates one of its balancing tools, the Short-Term Operating Reserve (STOR), then these STOR volumes will be re-priced at the higher of their utilisation price or the Reserve Scarcity Price (RSP) of £6,000/MWh multiplied by the LoLP. This is the same pricing mechanism which helped set the latest high price record on 4th March this year when the system price hit £2,242/MWh triggered by a LoLP of 37% whilst STOR was in action (see Market Insight).

This morning, the system has had excess energy, and so National Grid has been bidding off more power than they have been offering on. This has led to low Cashout prices despite the strong auction yesterday. This large pricing delta from the auctions is largely due to wind out-turning 1.5GW higher than forecast plus Coal Power Stations running close to full-load to ensure it is warmed and ready to be offered on later tonight.

Last month, the UK’s coal-free generation streak came to an end after two months – the longest period since the industrial revolution. This record is in part down to lower power demand, as Covid-19 restrictions hamper travel, commerce and industry. As noted in our previous Market Insight post, we have seen a reduction in this effect as Covid-19 restrictions are loosened with demand returning close to pre-Covid-19 levels for both the morning and evening peaks. More recently, due to the hot weather, we have seen a boost in demand as air conditioning units power on.

As the UK moves away from coal generation and continues to rely on harder-to-forecast renewable generation, the UK is seeing a rise in power price volatility. By investing in decentralised local generation and utilising our market-leading power forecasting we can help protect our customers from the costs associated with this ever-increasing price volatility. This allows Hartree Solutions to guarantee our customers fixed long term power savings over anything else achievable in the market.

written by
Mitch Hermens

More market insights


Kansai Electric Power Group and Hartree Partners sign first term contract in Japan coupling LNG supply with carbon investments. 

Japan, 14th December 2023: Japanese power company, Kansai Electric Power Group (Kansai Group), has signed…

Japan, 14th December 2023: Japanese power company, Kansai Electric Power Group (Kansai Group), has signed a binding term agreement with Hartree Partners for the supply of LNG alongside investment in a nature-based carbon project in Australia, the first deal of its kind in Japan. The deal represents Kansai Group’s long-term commitments to decarbonisation and the provision of low-carbon energy for its customers. 

This LNG supply agreement enables KE Fuel Trading Singapore Pte. Ltd (KEFTS) to grow its LNG portfolio which will support Kansai Group’s LNG supply-demand situation and customers around the globe.  

Also, through its expertise in global carbon markets and its project portfolio in Australia, specifically focused on nature restoration, Vertree Partners, Hartree’s global carbon market arm, will support The Kansai Electric Power Co., Inc. (Kansai Electric) to access future supply of high-integrity carbon credits to support its Zero Carbon Vision.  

Both companies will explore potential opportunities to support Japan’s national net zero targets in areas such as LNG, renewable energy, environmental products and carbon capture and storage (CCS). 

Hartree Partners is a well-established global energy and commodities firm with decades of experience in the physical and financial energy and commodities market. Its wholly-owned subsidiary, Vertree Partners, is focused on decarbonisation and environmental markets.  

“Carbon credits have an important role to play in realising a zero-carbon society,” said Hideaki Ikai, Executive Officer, Operation and Trading Division in Kansai Electric. “Kansai, as a leading company of zero-carbon energy, is proactively studying ways to create a carbon neutral society, and I believe that this collaboration with Hartree Partners will accelerate our activities to achieve the goal of carbon net zero by 2050.” 

Shinichi Kudo, Chief Executive Officer, KEFTS, added “The combination of LNG and carbon credits will give us a promising option to attain our mission to provide our customers with stable energy supply and decarbonization solutions.” 

Ahmed S Al-Awa, Managing Director of Hartree Partners Singapore Pte. Limited and a Partner of Hartree Partners, said “this forward-looking move by Kansai Electric Power Group sends an important signal that carbon markets are likely to become a key component of the natural gas/LNG value chain as the sector moves to decarbonise.” 

Ariel Perez, Managing Partner of Vertree Partners added “We are committed to supporting Kansai Electric Power Group to make credible investment in the carbon market. The market is evolving rapidly, and companies may be increasingly exposed. Investments such as these support future preparedness whilst also directing finance to nature-based solutions, without which we face continued environmental degradation and eco-system loss and increase the risk of missing our global climate goals.” 


About The Kansai Electric Power Co., Inc. 

Kansai Electric Power Group, as a Japan’s leading electric power company, is aiming for carbon neutrality throughout the entirety of its business activities by 2050 to limit global warming, while increasing energy independence to secure energy supply for its customers, Kansai Group can be found at 

About KE Fuel Trading Singapore Pte. Ltd 

KEFTS, a 100% subsidiary of Kansai Electric, was established as an LNG trading arm of Kansai Group in April 2017. KEFTS has been supporting Kasai Electric’s LNG supply-demand balance and providing LNG portfolio for customers around the globe, and now enhances its activity to support Kansai Group’s carbon neutrality at its base in Singapore.

About Hartree Partners  

Hartree Partners, LP is a leading global energy and commodities firm with an international reputation for integrity developed over decades. Our expertise enables us to capitalise on the transition from fossil fuels to a low carbon economy. Hartree’s global breadth and reach provide a competitive presence in a comprehensive range of commodity markets, enriched by the firm’s employees who add deep insight, expertise and innovative thinking. More information concerning Hartree can be found at 


About Vertree Partners 

Vertree Partners enables leading companies and institutions to invest in both nature and innovative climate technologies to assist them in reaching their decarbonisation goals. Founded in 2020, Vertree is focused on driving positive environmental and social impact, and providing its customers access to existing and future supply of high-integrity environmental commodities. It does this through directly financing quality emissions reductions and removals projects; partnering with renowned project developers; investing in innovative organisations and technology-based solutions; and providing its expertise in voluntary and compliance markets, trading, market analytics and risk management. Vertree is wholly owned by Hartree Partners. 


Read Article

AGP Sustainable Real Assets and Hartree Partners Announce US Expansion of Global Solar Partnership

AGP Sustainable Real Assets Pte Ltd (AGP) and Hartree Partners, LP (Hartree) today announce the…

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:

Read Article