Price reporting firm ICIS has announced that the partial severing of the UK’s interconnector to France may actually reduce British power prices.
Ongoing safety tests have restricted the availability of EDF’s nuclear capacity and the outage is likely to throttle exports.
After National Grid announced that four of the subsea which make up the interconnector had been severed, contracts for delivery this coming January (usually one of the coldest months) saw a day on day decrease of 1%.
The company stated that the interconnector would be running on only half of its 2GW capacity until the end of February due to the damage. There is an investigation underway to determine if the cables were cut by a shipping dragging its anchor along the sea floor during Storm Angus which hit last week.
ICIS power editor Jamie Stewart said “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, 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.”
Ordinarily, the UK would expect to be a net importer of energy from France but because France has some of its nuclear power stations offline for extended safety tests we are currently a net exporter. The reduction in the capacity for export means the UK will be keeping more of its own capacity over the winter months and this seems to be pushing the in-day prices down.