Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Fire cuts British power imports adding to supply squeeze, soaring prices

Published 15/09/2021, 09:34
Updated 15/09/2021, 18:25
© Reuters. FILE PHOTO: Migrating starlings fly at dusk past electricity pylons silhouetted by the sunset of a clear autumn evening in the Kent countryside,  in Graveney, Britain, October 26, 2015.    REUTERS/Dylan Martinez/File Photo

© Reuters. FILE PHOTO: Migrating starlings fly at dusk past electricity pylons silhouetted by the sunset of a clear autumn evening in the Kent countryside, in Graveney, Britain, October 26, 2015. REUTERS/Dylan Martinez/File Photo

By Susanna Twidale and Nina Chestney

LONDON (Reuters) -A fire halted a power link between France and Britain on Wednesday, squeezing tight UK electricity supply further and sending prices to near record highs.

Day-ahead British power prices jumped almost 19% on the news, nearing record highs hit this week exacerbated by low wind supply and soaring gas prices.

National Grid (LON:NG) said the fire prompted the evacuation of its IFA1 interconnector site in Sellindge in Kent.

“The fire at the IFA site essentially means the loss of 2 gigawatts (GW) of interconnection capacity between the UK and France which further tightens the supply situation in the UK,” said Roy Manuell, EU power and carbon analyst at ICIS Energy.

A spokesperson for National Grid’s electricity system operator (ESO) said Britain would have sufficient electricity supplies on Wednesday despite the incident.

“We currently have a sufficient buffer of spare capacity to operate the electricity system securely over this evening’s peak demand period,” he said in an email.

Wednesday's almost 19% price jump took British day-ahead electricity prices to 475.00 pounds per megawatt hour (MWh), close to a record high of 540 pounds MWh hit this week.

"The outage is going to lift the potential for price volatility as long as its offline.... and of course demand will get higher as we move further into winter,” said Glenn Rickson, head of European power analysis at S&P Global (NYSE:SPGI) Platts Analytics.

National Grid said late on Wednesday the fire would mean 1 GW, or half of capacity, would remain offline until 27 March 2022.

"Our investigation is ongoing and we will update the market with any changes as necessary," a National Grid spokesperson said via email.

© Reuters. FILE PHOTO: A farmer works in a field surrounded by electricity pylons in Ratcliffe-on-Soar, in central England, September 10, 2014. REUTERS/Darren Staples/File Photo

The other 1 GW capacity of the IFA1 link is currently offline due to planned maintenance which will be extended until Sept. 25, the spokesperson said.

The IFA2 interconnector, a second link between Britain and France commissioned in 2020, is operating and not affected.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.