UK Electricity Supplies hit by Perfect Storm

Electricity prices in the UK were already increasing because of a combination of the rising cost of fossil fuels, outages of nuclear power plants and an unseasonable shortage of wind.  However, the sudden shock of a fire at a National Grid site in Ashford, Kent shutting down a 2GW interconnection with France sent prices rocketing a further 19% yesterday.

The fire at the Interconnexion France-Angleterre site broke out in the early hours of Wednesday.  The site was evacuated and, fortunately, there were no reports of casualties.  Initial estimates are that the interconnection will be completely offline until 25th September; and will then be operating at only half capacity until March next year.  We have interconnectors with Belgium, Ireland and the Netherlands, as well as another one with France; but, in total, these only have a capacity of 4GW so the loss is significant.  Moreover, most of our imported electricity normally comes from France, where it is cheaper, so it is bound to have a lasting effect on prices.

It seem unlikely that the fire will directly lead to widespread power outages.  It appears that the steep hike in prices will force some large industrial users to shut down production, thereby reducing demand.  However, it provides a stark reminder of the fragility of our electricity infrastructure and the need to contingency plan for power outages beyond the typical 30-minute or 1-hour blackout.

Update 15th October

National Grid substantially revised their estimates for restoring IFA on 15th October.  They now aim to return to 50% capacity by October 2022, rising to 100% in October 2023.

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