U.K.’s Daily Power Price Jumps to Record as Gas Crunch Bites
(Bloomberg) -- U.K. electricity for the next day surged to a record for a second time this week, an early sign of what’s to come this winter.
The global crunch in natural gas supplies has already sent energy prices soaring, and the shortage is being compounded in the U.K. by a series of power plant outages and low wind. Consumers are bracing for price hikes, while the regulator announced on Tuesday that two suppliers had ceased trading.
An auction for power for Thursday cleared at 277.30 pounds ($381.55) per megawatt-hour on N2EX, up more than 100% from Wednesday’s price.
Several unplanned halts are crimping supply, including units at Drax (LON: DRX ) Plc’s biomass plant, RWE AG (OTC: RWEOY )’s Didcot B, EPUKI’s South Humber all halting unexpectedly. Electricite de France SA (PA: EDF )’s Heysham 1.1 nuclear reactor is due back on Thursday after an extended outage.
While it’s usual for power plant operators to carry out last minute maintenance ahead of the heating season starting in October, the U.K. has a more serious problem looming. Britain is becoming increasingly exposed to dips in wind generation a situation that will worsen as coal stations shut in the next three years and aging nuclear units close early. It’s a political issue as these high prices, even in the short-term, will feed through to consumer bills.
A lull in wind speeds in much of Europe this year has aggravated the high prices. Countries have increasingly had to increase coal generation to fill in the gap.
U.K. peak demand is forecast to increase slightly to 33,752 megawatts at 7:30 p.m. on Thursday, compared with 33,675 megawatts at 8 p.m. Wednesday, National Grid (LON: NG ) Plc data show.
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