DRAX: Electrical Insights

Electricity under lockdown: cheaper, cleaner, but harder to control.

It’s been encouraging to see the recent quarterly report from the Drax Group which provides various insights into national electricity consumption.

The report goes on to highlight the various improvements in regards to green energy output as part of the national electricity mix, something we keep up to date with here at Pure Renewables.

Here we’ve outlined various extracts from the report. For more reports and information please visit: https://reports.electricinsights.co.uk/

“Solar Eclipses Coal”

May saw Britain’s solar panels produce more than ever, while every coal power station spent the whole month sitting idle. Solar panels supplied an average of 2.7 GW of power during May, surpassing 10% of the month’s electricity demand. Growing output from renewables, along with suppressed demand saw no coal power stations operate for 67 days straight.

Britain experienced unusually good weather, with sunshine levels during spring rivalling some of the best summers on record. Much of this was down to favourable conditions, a large patch of high pressure blocked incoming storms. Britain’s lockdown also had an influence, as greatly reduced traffic on our roads meant less air pollution, and fewer flights meant less contrails in the sky, both of which absorb or scatter some of the incoming sunlight.

Capacity & Production Statistics

Four-tenths of Britain’s electricity came from renewables last quarter, while coal supplied just 1/500th. Coal’s share has fallen from over a fifth just five years ago. The prospect of zero coal over a whole quarter now seems quite real.

Electricity output from wind, solar and biomass were each up more than 10% on this quarter last year. Combined with lower demand, this pushed fossil fuels off the system. Gas output was down a third, and coal all but disappeared, supplying just 0.1 TWh over the three months.

To underline this role reversal, the average capacity factor of Britain’s renewables was 27% versus just 24% for fossil-fuelled power stations. This mirrors the wider trend of coal power station capacity factors falling worldwide.

Falling demand and prices also reduced Britain’s trade deficit in electricity. We imported less power from our neighbours, and exported twice as much compared to this quarter last year.

Electricity prices plummet

Power prices have fallen to their lowest in nearly two decades. Prices are down by two-thirds over the last two years, reaching a minimum of just £22/MWh over the mont of May. Britain spent £1.3 billion less on electricity supply over the second quarter of this year compared to last year. The total cost of generation (based on wholesale prices plus balancing charges) fell from £3.0 to £1.7 billion over the three months.

Oil prices halved over the last year, going from $60 a barrel during Q2 of 2019 down to just $28 averaged over the last quarter. Gas prices fell 58% over the same period, but while a third of Britain’s electricity comes from natural gas, fuel isn’t the only thing to affect power prices.

Lower demand for electricity drives its price lower. When fewer power stations are needed, only the most efficient (and cheapest) ones stay online. When pushed to the extreme, National Grid must ask renewables and even nuclear reactors to reduce their output to avoid instability. And just as US oil prices turned negative briefly in April due to excess production, oversupply of electricity routinely forces power prices below zero.

The chart at the bottom of this page illustrates this effect. At times when less than 10 GW of conventional, dispatchable generators were needed, prices plummeted below zero.

There is of course a lot of scatter (in some hours prices went negative at 14 GW, sometimes they were still positive at 7 GW), but the trend is clear.”

(Graphics & Text Extracts: Drax: Electric Insights Quarterly Report April to June 2020)

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