National Grid introduced the Dynamic Containment (DC) product last October to meet the need for fast acting frequency response as market imbalances increase with the rise of intermittent renewables. The market (dominated by batteries), has been clearing around an unofficial cap of 17 £/MWh/h (the equivalent of 149 £/kW/yr for a 1 hr duration battery). This reflects the maximum price Grid have been prepared to pay for the service to date.
Although the DC price level has been stable, Grid tender data shows some interesting bidding behaviour. Most companies do not appear to be adjusting their DC bids based on the opportunity cost of alternative returns available in the energy market. For example rational bidding behaviour would suggest DC tender bids should reflect very high wholesale & BM prices across the last few weeks (e.g. above 1000 £/MWh). A clearer energy vs DC market price relationship may evolve as the DC market & bidding strategies mature.