Severing of French interconnector may cut UK power prices
The partial severing of the UK’s interconnector with France may reduce British power prices over the winter, price reporting firm ICIS has said.
The outage is likely to throttle exports to France where ongoing safety tests have limited the availability of EDF’s nuclear capacity.
Contracts for delivery in January 2017, usually one of the coldest months of the year, saw a day-on-day decrease of 1 per cent after National Grid announced yesterday that four of the eight subsea which make up the interconnector had been severed.
The firm said the damage to the interconnector meant it would be running at half of its 2GW capacity until the end of February. It is investigating the possibility the cables were cut by a shipping dragging its anchor along the sea floor during Storm Angus last week.
“The UK’s supply shortage has meant that at times of highest demand, in the late afternoon, electricity in the UK has been priced above France, attracting imports and reversing the flow of power at peak times,” said ICIS power editor Jamie Stewart. “However, the UK has actually exported to France for most hours of the day over November, because of a shortage of French nuclear capacity.
“This could mean that UK power prices will be lower in delivery over the winter, because the outage will limit the amount of power that can be sent out of UK, so more supply will stay in the national market. However, if prices spike high enough during times of peak demand, the price of those hours could be high enough to bring the overall average price higher.”
Stewart told Utility Week that UK has been a net daily exporter of power to France since the beginning of October - a phenomenon which hasn’t been since the Carbon Price Support was introduced in April 2013.
There have been several spikes in power prices in the UK since the end of the summer due to the safety tests being carried out by EDF on its nuclear fleet in France.
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