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Q3 2020 BSUoS Analysis

November 20 2020

Over the third quarter of 2020, a combination of high renewable output and reduced demand from COVID-19 meant that BSUoS value remained higher than normal when comparing it to the rolling three year average prior to the emergence of COVID-19.

The BSUoS flat average was £4.80 per MWh (significantly higher than the £3.08 per MWh 3 year average) although that figure was reduced to £4.67 per MWh with CMP345 and CMP350 which is shown in Fig.1 below. This is not as severe as the second quarter of 2020, which under the strain of the first lockdown had a flat average of £5.73 per MWh.

Q3 2020 saw the implementation of CMP345 and CMP350, modifications introduced to cap BSUoS as part of a BSUoS COVID Support Scheme. BSUoS was capped at £15.00 per MWh starting on 25/06/20, and was subsequently reduced to £10.00 per MWh from 14/08/20 and extended until the end of October.

Fig.1 – Q3 2020 BSUoS analysis using example wind farm data (£ per MWh)

We have analysed data for two example wind farms, one in northern Scotland and one in England to determine the impact of these modifications. The volume weighted BSUoS benefit for the wind farm in England would have been £5.60 per MWh, but with the caps this was reduced to £5.39 per MWh. For the Northern Scotland wind farm, the caps had a positive effect as they limited the charge applied, improving this from -£3.95 per MWh to -£3.75 per MWh.

Overall the impact to renewable generators was limited, reducing revenue for those being passed through BSUoS benefits in power purchase agreements, or in the case of northern Scotland generators slightly lowering the charges incurred.

Fig.2 – Non-locational BSUoS price for each settlement period over Q3 2020 (£ per MWh)

Renewable Exchange provides a validation service of historical BSUoS charges from suppliers for renewable generators and asset owners to ensure the full benefits are being passed through accurately to generation asset owners.

For further information please get in touch with our team of experts.

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