Power prices are set to soar once more in the next couple of days following a major fire at one of the interconnectors that links Britain with France.
For several hours firefighters battled the blaze at Kent, on the GB side of the 2,000MW IFA-1 cable, at one point with 12 fire engines.
The outage couldn’t have come at a worse time for Britain, which is currently experiencing an energy crunch with limited supplies, low margins and soaring power prices.
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Britain hits power imports record
Data from energy market analyst EnAppSys shows that in the year to date, overall average power prices have been more than double the average price in 2019-2020 and in the last two weeks daily average prices have been eight times the average in 2019.
September 14, the auction cleared with a peak energy price of £2,500/MWh – a record high – for the peak demand period at 7pm versus the average baseload price of around £40/MWh throughout 2019-20.
Prices on September 15 in the auction for September 16 cleared lower but still at an extreme price of £1860/MWh for the evening peak, but prices on the remaining interconnectors for capacity were extreme, with the Britned cable clearing at €2131/MW/h.
Phil Hewitt, director of EnAppSys, said: “This fire at IFA1 is a major event; we could be looking at an extended outage. In the long run, we will lose 2GW of import to the GB markets whilst we are struggling at the moment with low margins.
“The immediate effect is that since IFA was on half capacity anyway, we have only lost 1GW for this current period of extreme prices – it was due to return to full import at the weekend. Today the tight market will be affected. Tomorrow a forecast tight market will become really tight; expect even higher prices in the spot markets going forward.
“With margins tight anyway for this winter, as exposed by National Grid ESO’s early winter outlook publication this year, it puts the GB market in a risky position for the winter and especially if we suffer from periods of low wind and cold temperatures. National Grid had a projected derated margin of 4.3GW in its early winter outlook report; this looks like it may have just almost halved.
“On the other side, France has now got a net extra 2GW of available supply so this should help prices on the continent.”
Contributed by EnAppSys