Guides
Changelog
Guides
Back to All
improved

v3 release: changes since v2.4

8 months ago by Robyn Lucas

As well as updating the commodity prices, we have made some key under-the-hood changes to our fundamentals model that we're excited to share.

1. Supply stacks - now with far more thermal variation

  • We have split our half-hourly supply stacks up into smaller chunks for thermal plants, to better reflect varying short-run marginal costs due to efficiency curves and ramp rates as well as different efficiencies within the fleet
  • Impact: more price variation within a day, better reflecting historic prices (checkout Backtest)

2. Fleet storage - better dealing with price cannibalization

  • Previously we had occasions where the fleet storage charging was causing price increases in the power price
  • Fleet storage now responds to de-rated margin, has a strike price that reflects the cycling cost of the system, and is limited by how much volume can be dispatched at once.
  • Impact: lower price spreads over the forecast horizon as storage cannibalizes significant spreads

3. Capacity build out determined by economics, moving away from the NESO Future Energy Scenarios as the major input

  • New build, retrofit, and retirement of unabated gas CCGT, OCGT, peakers; and CCGT CCS; and battery storage have a build-out of capacity which responds to the economics of these plants
  • The capacity market model has a carbon element post-2030. Volume procured - and price - responds to the minimum margin on the system
  • Impact: our capacity build-out has changed since v2.4:
    • Extended CCGT retirements: 1.7GW of high efficiency unabated CCGT online in 2050
    • Higher CCS CCGT capacity by 2050: 7.3GW vs 6GW in v2.4
    • Slightly fewer batteries by 2050: 48GW vs 50GW in v2.4.

4. Other minor changes

  • Wider generation TNUoS
    • Impact: transmission system BESS now face (usually) revenue line item from TNUoS, depending on which generation zone they are in. Available via custom run.
  • REGO prices are included when getting the SRMC for solar and wind
    • Impact: solar and wind SRMC is reduced by around £7/MWh in the shorter term.
  • Updated commodity prices - gas & carbon & hydrogen
    • Impact: 12% reduction in price and 10% in spread in 2024 with impact reducing later
  • Demand inputs aligned to 2023 FES Consumer transformation scenario
    • Impact: higher demand after 2040 leads slightly higher average power prices at the back of the curve
  • Derate day ahead trading capacity to reserve more battery capacity for the BM after 2027
    • Impact: higher overall revenues post-2027 as the batteries capture more value from the Balancing Mechanism
  • Get national bid and offer prices by varying demand by 8% of the average annual demand rather than 10% of half-hourly demand. This was necessary to avoid very high bid-offer spreads post-2045.
    • Impact: Minor compared to v2.4, average bid-offer spreads remain consistent.