GB Wholesale Market Summary January 2021 Published February 2021 1. January 2021 saw the monthly average power price soar to a decade-high of £71.2/MWh. The E x e c u t i v e £17.1/MWh (or 32%) increase from December 2020 and £36.4/MWh (or 104%) increase from January 2020 was the result of a combination of higher fuel prices, carbon prices and demand. See slides 5, 6, and 7. S u m m a r y 2. Due to colder temperatures, low renewable output levels and limited generator availability, January saw several periods of tight system margins. This resulted in National Grid ESO issuing both Capacity Market Notices (CMN) and Electricity Margin Notices (EMN) and turning to higher marginal cost generators. Consequently, these periods saw wholesale prices in excess of £500/MWh. See slide 5. 3. Colder temperatures caused monthly transmission power demand in January to increase by 1.0 TWh (or 4%) relative to December 2020, while the share of low carbon generation fell 8 p.p. to 51% of total generation in January. See slides 10 and 11. 4. Thermal generation in January increased by 2.3 TWh relative to December to meet the increase in demand and meet the shortfall from lower renewables output. As a result, carbon emissions rose by 1.2 MtCO2e (or 26%) compared to December. See slides 11 and 14. 5. Wind assets saw an increase in their profitability in January as the significant increase in wind capture prices (£15.1/MWh or 31% relative to December) outweighed the 5 p.p. decrease in load factors (to 37%). See slides 20 and 22. 2 About Aurora Aurora offers power market forecasts and market intelligence spanning Europe’s key markets & Australia Comprehensive Power Power Market Bespoke Market Services Forecast Reports forecasts Power market Power market Aurora can provide ✓ forecast reports ✓ forecast reports ✓ power market forecasts upon Forecast data in Forecast data in request ✓ Excel ✓ Excel Global energy ✓ Analyst support ✓ market forecast reports Strategic insight ✓ reports Regular subscriber ✓ group meetings ✓ Bilateral workshops ✓ Analyst support Source: Aurora Energy Research 3 Agenda I. System performance II. Company performance (available to subscribers only) III. Plant performance 4 1 System performance Half-hourly APX spot price for January 1 APX spot price Monthly average price in January 2021: £/MWh £71.16/MWh 1,100 1,000 900 800 700 600 500 400 300 200 100 0 04-Jan 11-Jan 18-Jan 25-Jan 01-Feb 1) Half-hourly APX is the volume-weighted reference price over that half-hour interval, as provided by APX Power UK Sources: Aurora Energy Research, Thomson Reuters 5 1 System performance Historic monthly average APX spot price Average APX spot price1, £/MWh 75 70 65 60 55 +104% 50 45 40 35 30 25 20 Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- 10 11 12 13 14 15 16 17 18 19 20 21 Average monthly spot price Annual average spot price 1) Average monthly APX is the average over the month of the volume-weighted reference prices for each half-hour interval. Sources: Aurora Energy Research, Thomson Reuters 6 1 System performance Historic fuel prices Gas, Coal and Carbon daily prices Gas/Coal price Carbon price £/MWh £/Tonne 30 54 25 45 20 36 15 27 10 18 5 9 0 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Gas Coal CO2 Sources: Aurora Energy Research, Thomson Reuters 7 1 System performance Half-hourly spot prices against half-hourly system margins for January APX spot price1, £/MWh 1,100 1,000 900 800 700 600 500 400 300 200 100 0 10,000 20,000 30,000 Margins2, MW 1) Half-hourly APX is the volume-weighted reference price over that half-hour interval, as provided by APX Power UK. 2) Margins are calculated as the difference between MEL and Demand for each half-hour period. Demand data presented here is Initial Transmission System Demand Out-Turn, and does not include embedded demand. MEL is calculated as the sum of all transmission BM units reporting MEL values in each half-hour. Where a BMU gives multiple values in a half-hour, only the least is taken. Sources: Elexon, National Grid, Thomson Reuters, Aurora Energy Research 8 1 System performance Daily January max and min demand Relative to historic January max and min demand since 20101 Demand2, GW 60 55 50 45 40 35 30 25 20 15 10 5 0 F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa Su Daily range Historic maximum/minimum 1) Data from previous years is matched to the nearest weekday within the current month, to maintain the weekly demand pattern. 2) Demand data presented here is Initial Transmission System Demand Out-Turn, and does not include embedded demand. Sources: National Grid, Aurora Energy Research 9 1 System performance Monthly historical demand on the transmission system Total demand1, TWh 34 32 30 28 +2% 26 24 22 20 18 16 Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- 10 11 12 13 14 15 16 17 18 19 20 21 Total monthly demand Annual average demand 1) Demand data presented here is Initial Transmission System Demand Out-Turn, and includes station transformer load, pumped storage demand and interconnector demand, but does not include embedded demand. Sources: National Grid, Aurora Energy Research 10 1 System performance Monthly fuel mix breakdown Output1 TWh 0.3 24.8 26 1.2 1% 24 1.9 5% 22 2.3 8% 20 2.4 9% 18 3.5 10% 16 14% 14 4.5 12 100% 18% 10 8.7 8 6 4 35% 2 0 CCGT Nuclear Offshore Onshore Wind Other fossil2 Other Coal Solar Total Wind renewables3 Load factor, % 43 63 48 26 35 50 31 3 1) Includes outputs from generators registered as BM Units as well as embedded wind and solar PV assets. All numbers are rounded to 0.1 TWh which means that subtotals may not sum to total value. 2) Other fossil includes oil, CHP-CCGT and OCGT. 3) Other renewables includes biomass and hydro. Sources: Elexon, Sheffield Solar, National Grid, Aurora Energy Research 11 1 System performance Historical fuel mix breakdown Output1 % of total 100% 1% 7% 8% 6% 6% 5% 11% 10% 90% 7% 17% 14% 8% 6% 9% 8% 5% 9% 80% 12% 18% 8% 10% 18% 5% 8% 36% 33% 16% 70% 16% 9% 9% 8% 17% 60% 28% 9% 37% 7% 50% 46% 46% 43% 36% 39% 40% 38% 34% 35% 36% 23% 21% 30% 16% 6% 6% 20% 7% 5% 22% 21% 22% 22% 10% 18% 20% 21% 19% 20% 17% 20% 18% 0% Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan 10 11 12 13 14 15 16 17 18 19 20 21 Nuclear Coal CCGT Other fossil2 Other renewables3 Onshore Wind Offshore Wind Solar 1) Includes outputs from generators registered as BM Units as well as embedded wind and solar PV. 2) Other fossil includes oil, CHP-CCGT and OCGT. 3) Other renewables includes biomass and hydro. Sources: Elexon, Sheffield Solar, National Grid, Aurora Energy Research 12 1 System performance Monthly interconnector flow duration curve Flow in each half-hour for GB interconnectors Flow1, MW 2,500 2,000 1,500 1,000 500 0 -500 -1,000 -1,500 -2,000 -2,500 Time Half-hours I/C France I/C Netherlands I/C N. Ireland I/C Rep. Ireland I/C Belgium 1) Positive flow is imports into GB, negative flow is exports. Sources: Elexon, National Grid, Aurora Energy Research 13 1 System performance Monthly emissions by technology Emissions1 Carbon intensity MtCO2e gCO2e/kWh 7 280 +23% 6 5.8 240 5 4.8 4.6 200 3.9 4 3.8 3.8 3.7 160 3.5 3.6 3.4 3 2.9 120 2.4 2.1 2 80 1 40 0 0 Jan- 20 Feb- 20 Mar- 20 Apr- 20 May- 20 Jun- 20 Jul- 20 Aug- 20 Sep- 20 Oct- 20 Nov- 20 Dec- 20 Jan- 21 Biomass Other fossil2 CCGT Coal System carbon intensity 1) Please refer to Appendix for details of methodology employed to calculate emission amounts. Includes all Balancing Mechanism plants. 2) Other fossil includes oil, OCGT and gas CHP-CCGT. Sources: Elexon, Ofgem, Aurora Energy Research 14 Agenda I. System performance II. Company performance (available to subscribers only) III. Plant performance 15 Agenda I. System performance II. Company performance (available to subscribers only) III. Plant performance 16 3 Plant Performance Plant utilisation – load factors by plant Load factor1 Column width % reflects capacity 100 90 80 70 60 50 40 Ø 40 30 20 10 0 -10 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 Capacity, GW Biomass Coal Hydro Nuclear Offshore Wind Onshore Wind Solar CCGT Gas CHP-CCGT Interconnector OCGT Oil Pumped Storage 1) Represents 60 plants with highest capacity according to the Balancing Mechanism (BM) database, as well as aggregated data for wind and solar. Capacity of each plant represents the sum of capacities of all its generators that have been active at least once in the last three months. Please refer to Appendix for a detailed description of the data used and categories presented Sources: Aurora Energy Research, Elexon, BEIS 17 3 Plant Performance CCGT plant utilisation – by plant Full load hours1 Column width % of total for the period reflects capacity 100 91.4 90 82.0 80 75.9 70 64.9 64.7 58.9 58.9 57.4 57.3 56.3 60 56.9 53.5 50 45.7 44.9 43.9 40 35.4 35.2 35.1 30.0 30 26.5 20 12.8 12.3 11.7 11.3 11.0 0.0 10 0.0 2.7 0.0 0.0 0.0 0.0 0 0.0 0 5 10 15 20 25 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 32 33 Capacity, 29 31 GW Calon Centrica Drax EDF EPH ESB Intergen Munich Re RWE SSE Uniper 30 Plant Names: 1.