Agile Pricing - strange things are afoot...

Pat38493

la531983 said:

I suppose Tracker is treating every hour as an equal which doesn't happen in reality. Electric usage at 3am is different to 3pm etc. 

True but even so, I would still expect Agile to be in the same general ballpark over the course of the day on most days.  However what you see is that during some periods, the price of Agile is higher than tracker almost all day, meaning that on that day agile will be more expensive unless you can shift your entire load into a couple of 30 minute windows.

In fact I think above you predicted a price of 55p at peak time tomorrow, but actually it's 65 (and 69 in my area).  It looks like at times of market volatility, the agile price suddenly veers far above the tracker price, even though they are both advertised as being based on energy wholesale rates.  

la531983

Indeed I can't quite fathom it out. 

Here's hoping these strikes get called off and it's only a short term blip. 

mmmmikey

From what I've seen when Tracker has a good day, Agile has a very good day, and conversely if Tracker has a bad day Agile has a very bad day.

The Agile price is based on a multiplier of 2.2ish of the market rate it follows, plus a fixed offset that applies to the peak 16:00 to 19:00 period only.

The Tracker price is based on a multiplier of 1.4ish (I think?) of the market rate it follows plus a fixed offset that applies all day.

This means that:

1. The Agile price swings more with market prices - a 1p rise of the wholesale price leads to a 2.2p rise in the Agile price but a smaller 1.4p rise in the Tracker price.

2. The lower the price goes, the more significant the Tracker offset becomes as a % of the price and vice versa. So generally higher prices make Tracker more attractive and lower prices make Agile more attractive (other things being equal).

What this doesn't factor in is any compensating or exaggerating effect in the underlying market prices. And it doesn't mean that high prices automatically mean that Tracker will be better because the potential still exists with Agile to buy at the day's best rates. Also, it's quite possible for average Agile rates to go up and for the days cheapest rates to go down at the same time.

All caveated with "I think" :-)

la531983

Seen nothing online to suggest the strikes have been called off. 

GingerTim

https://www.reuters.com/business/energy/australia-lng-strikes-would-need-last-over-month-spike-prices-analysts-say-2023-08-22/

Mstty

Media bandwagon in full swing. One source spooking the market another suggesting it won't affect anything at all.

Just the threat (notice in Aus).of a strike

So what are the other reasons for the spike. Increased demand for gas across Europe?

la531983

Mstty said:

Media bandwagon in full swing. One source spooking the market another suggesting it won't affect anything at all.

So what are the other reasons for the spike. Increased demand for gas across Europe?

A few things I have read, no idea if true. Some of these are also affecting the leccy price:

- the French have reduced their nuclear output
- maintenance on a Norwegian gas field
- low wind generally around Europe. It's only generating 6.5% of our Grid at the moment which is tiny. 

Not buying for a minute though that the Australia thing hasn't had any impact. 

mmmmikey

I had to read that Reuters article a few times but I think it says that prices won't go up further as the strike continues because the strike cost has already been reflected in prices. So I guess this means that prices would fall when the strike ends. But it also seems to question the effect of the strike at all. So in a nutshell I'm confused 🤔

spot1034

If anything it's probably just an indication of how jittery the market is. 

la531983

UK gas markets have opened up pretty stable this morning, although the late jump yesterday is likely to be factored into Agile and Tracker pricing for Thursday, sadly.

Hourly wholesale pricing is released around 10am so will get a better indication then.