Fire in Cable From France Sends British Electricity Prices Soaring
Adding to the uncertainty, breezes of late have been feeble, cutting the production of electricity from Britain’s many offshore wind turbines.
Losing the cable will further squeeze the power grid at an inopportune time, analysts say. Prices of natural gas, the fuel for plants that provide power during times of peak demand, are already at very high levels. Part of the reason is high consumption in China and elsewhere has meant that Europe has not built up reserve storage of gas for the winter.
Natural gas futures rose more than 6 percent on Wednesday.
“This incident has put more pressure and reliance on flexible generation sources, such as coal, gas and batteries, to ensure the lights are kept on,” said Catherine Newman, chief executive of Limejump, a company that manages large-scale batteries and other devices used to balance the power system.
The situation means that National Grid, the British grid operator, needs to press standby sources of generation, like high-polluting coal-fired plants, into service, often paying high prices.
As a result, energy prices are likely to rise further for consumers in Britain and elsewhere in Europe, where the effects of high natural gas prices are being felt. Britain’s energy regulatory agency, Ofgem, has already notified consumers that ceilings on some standard energy rates will be raised by 12 percent.
Industry is being squeezed as well. Gareth Stace, director of UK Steel, a trade body, said in a statement Wednesday that “extortionate prices are forcing some UK steelmakers to suspend their operations” during periods when prices soar. The high prices were signs of an “unhealthy” energy market, he said.
Consumers all over Europe are being squeezed by high energy prices. On Tuesday, Spain’s government, facing political pressure, announced measures to protect angry consumers.