Does temperature impact the System Price?

Thomas Demetriades in ELEXON’s Market Analysis team, investigates how the temperature influences the System Price. The article includes visualisation graphics that you can interrogate to get a better understanding of the data behind the analysis.

The analysis shows that when we feel more extreme temperatures (temperatures greater than 25°C or lower than 5°C) the system is Short in 66% of Settlement Periods. July 2018 was a particularly warm month, with the average GB noon temperature being 22°C. We source the GB average noon temperature, used for setting profile coefficients, from the Met Office.

Data in this article

  • Graph 1 shows the GB average noon temperatures and daily average System Price in July 2018
  • Graph 2 compares July temperatures and prices in 2016, 2017, and 2018
  • Graph 3 shows the system price and system length across different temperature bands, for all Settlement Periods since the start of 2016
  • Graph 4 shows the maximum and minimum System Prices and noon temperatures, between January 2016 and July 2018

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We are creating a collection of ‘ELEXON insights’ which will cover a range of topics. Our first examples are based on content from the System Price Analysis Report (SPAR). 

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