Thomas Edwards

Modeller at Cornwall Insight, all views are my own and do not reflect the position of my employer or the BSC panel.

[Thomas Edwards @NotionalGrid]

Energy Geek? Gamer? Ever wished these passions intersected? Check out the video demo below of my latest hobby project - a management simulator for operating a power network, PM me if your interested in getting a copy of the demo for play-testing!
https://t.co/Zrr5MfNP2m

[Thomas Edwards @NotionalGrid]

This is NESO conflating trading with NIV chasing, which is two different things. If I signal a physical position (i.e. FPN of 100) and spill (i.e.ECVN of 0) then I get paid the imbalance price, but I still have told NESO an accurate FPN, so no re-dispatch needed.

[Thomas Edwards @NotionalGrid]

Good to know that DESNZ don't know how NIV chasing works

[Thomas Edwards @NotionalGrid]

You can't prohibit something you can't do, if I have a BMU with a +ve FPN Flag I can't NIV chase anyway.

[Thomas Edwards @NotionalGrid]

@KathrynPorter26 I think the £318mn they got paid for Langage is ~£430mn now, so seems like they've done well. Lets ignore SHB as its just limping on in the T-1s.

[Thomas Edwards @NotionalGrid]

Centrica completes acquisition of Severn Power 850MW CCGT from Calon Energy

https://t.co/2B8h6YY9zl

[Thomas Edwards @NotionalGrid]

@EnviWood I'm not being that sophisticated in a tweet! Just assuming the Wholesale and BM revenues cover the TNUoS and gas costs and then the CM is the nice investible revenue.

[Thomas Edwards @NotionalGrid]

@EnviWood The key one for Severn Power would be when they start needing to bid in for refurbishment agreements. And when they do they can then have the optionality to switch between 1 year and 3 year agreements.

[Thomas Edwards @NotionalGrid]

@Analysis_OilGas If the CM cleared at £60/kW, which it didnt this year, but we beleive that is well within the bounds of possibility for the next ten years.

[Thomas Edwards @NotionalGrid]

If we assume it has 10 years left (built in 2010) of CM payments left I think it would need £60/kW each year at an 85% de-rating factor to make back that £370mn. Which seems like a reasonably achievable outcome, with other revenues paying for Gas and Network charges. a

[Thomas Edwards @NotionalGrid]

£370mn for 850MW is about £435/kW, which you could buy a new recip gas engine or most of a new OCGT for.

[Thomas Edwards @NotionalGrid]

I know this is fruitless but I think we are agreeing here, Renewables are growing but they aren't going to displace gas entirely from the system by 2030, and my point is that breaking the link between gas and power prices is therefore difficult.

[Thomas Edwards @NotionalGrid]

@Jake_lufc11 This exactly! We don't have to banish gas entirely to get a better outcome.

[Thomas Edwards @NotionalGrid]

Also, where is the breaking of the link between gas and power? By the government own ambition gas will still be running in 50% of hours (generous reading 30% of the time?)

[Thomas Edwards @NotionalGrid]

@LowCarbonD61778 Thats volume though right? rather than % of time in merit?

[Thomas Edwards @NotionalGrid]

@garethmillerCE Still need a physical PPA yes, but anything in place now would need to change to reflect the new arrangement

[Thomas Edwards @NotionalGrid]

New GB wholesale mechanism being consulted on - the Wholesale CfD - RO genertors get to keep their ROCs, but exchange their current PPAs for a government backed one at a fixed price

[Thomas Edwards @NotionalGrid]

@aDissentient Looks like they aren't planning changes to ROC legislation?

[Thomas Edwards @NotionalGrid]

A ROC generator probably only has 15 years of useful life left, so the agreement length is probably around 10 years at least? We put the long-term PPA market for a index linked discount around 85% for a wind farm, so if thats where the market is offering the Govt has to be higher

[Thomas Edwards @NotionalGrid]

Seems odd, as there would be little saving to the customer here, unless the generator accepted a WCfD with a haircut. A generator would be under a PPA with a discount to the day-ahead price, say 90%. So what discount would a generator be willing to accept for a longer agreement?

[Thomas Edwards @NotionalGrid]

@garethmillerCE My concern is the effect on interconnector trades would blow everything else out the water.

[Thomas Edwards @NotionalGrid]

What practical short-term options might exist for capping or de-linking gas from power prices? Three spring to mind from recent REMA discussions, converting RoCs to CfDs, iberian gas price caps and moving CCGT to a RAB model.