2 July 2002 – New rules governing UK electricity trading due to be introduced today which will allow firms to trade wholesale power closer to real time than at present have led to a firming of power prices.
A report in the Financial Times quotes one trader as saying, “There’s a bit of uncertainty until people see the new system working”.
Under the new rules, “gate closure” – the last point trading can take place – will change from 3.5 hours before real time to one hour.
Prices for day ahead on Monday rose from £13.50 per MWh to as high as £18.00, before falling back to £17.50. The forward curve rose between 10 and 15 pence on the back of higher gas prices. Winter 2002 started at £17.51, close to Friday’s closing bids, and then rose to £17.66.
The rise in gas prices meant the spark spread, the profit on generating power from gas, sank to £1.42 compared with £1.89 on Friday.
Traders said the spark spread, typically around two pounds, was at the lowest level since April.
Summer 2003 sold at £15.05, up 10-15 pence, while winter 03 went through at £18.10.
Traders bought day ahead capacity for the second day running to export power to France on the UK/France interconnector, taking advantage of high French electricity prices.
Two hundred megawatts was sold at €4.14/MW and 300 at €3.18.