Q4 2023: Introduction

2023 marked a return towards normality for Britain’s power system.  Wholesale electricity prices continued falling back towards their levels from before Europe’s energy crisis, and imports from the continent resumed after a brief hiatus.  This pushed down generation from gas by one-fifth, allowing carbon emissions to get back onto their trajectory towards net zero.  Article 2 recaps the year.

A major government announcement came in January.  Britain’s first negative emissions power station received planning consent, allowing Drax to install carbon capture and storage onto two units of its biomass power station.  Article 3 looks at why the UK is looking to take the lead on this technology, and what it means for the next phase of the road to net zero.

December provided several positive developments for the UK’s wind industry.  After the last round of the CFD auctions attracted no offshore wind bids, the Government raised the next auction’s price cap to £100 / MWh (advertised as £73 / MWh in 2012 terms).  Ørsted announced the go-ahead for Hornsea 3, a 2.4 GW wind farm in the North Sea (enough to power over 3 million homes).  Britain’s wind farms also had a record-breaking month in December, and over Quarter 4 of the year, wind was the largest source of electricity in Britain for only the second time, supplying a record 35% of demand.

More renewables mean more volatility for the power system.  Negative electricity prices are on the rise across Europe, and the number in Britain has tripled over the past year.  Article 4 explains how negative power prices are driven by excess renewable output combined with a lack of flexibility, and what we can do about them.

One solution is to increase Britain’s connectivity to other markets.  Article 5 reports on the Viking Link, the country’s first interconnector with Denmark, which started operating in December.  This should add more flexibility to the grid and should help to reduce electricity prices further in the coming years.

The changing annual electricity generation mix over the last ten years