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A major fire at Britain’s main submarine cable for electricity will reduce imports from France until the end of March next year, National Grid warned, raising concerns about tight stocks at a time when power prices have already risen to record highs.
The FTSE 100 Energy Company said on Wednesday this morning that a fire broke out at Sellindge near Ashford in Kent, where underground cables belonging to the IFA1 interconnector switch to a switching station. Emergency services were on most of the day.
Natural gas prices in the UK, which have reached a series of record highs in recent weeks, have risen more than 18 per cent on the news, and traders have calculated that power stations will have to run harder in the coming weeks – and possibly months – to offset the loss to reimburse imports.
Gas prices at £ 1.89 per term are more than double the level they traded just two months ago, and more than five times the previous September level.
The IFA1 terminal has been used since its opening in 1986 to import electricity from France, which was largely generated by nuclear power, to balance the British grid.
The work will be completed on September 25, but National Grid has warned that only 1GW capacity will be available until March 27 next year due to fire damage.
“Our investigation is ongoing, and we will update the market if necessary,” National Grid said. No cause for the fire has been identified yet, a company spokesman said.
A second 1GW connection between Britain and France, known as IFA2, is not affected.
National Grid ESO, the part of the electricity system responsible for balancing Britain’s electricity system, said that despite the fire on Wednesday night, it expected ‘sufficient’ margins between supply and demand during peak hours.
However, analysts have expressed concern about the impact on stocks in the coming months. Even before the fire, National Grid warned ESO that there would be some “tight periods during the winter”, especially in the “shoulder months”, such as in September, when many power stations are doing maintenance.
Glenn Rickson, head of European power analysis at S&P Global Platts Analytics, said the disruption “could not come at a worse time for the UK”.
The UK experienced record electricity prices in recent weeks, as strong gas prices have penetrated the power market, while unsuitable weather has reduced the generation of wind power. As a result, some coal-burning plants were fired before peak hours.
Rajiv Gogna, a partner of LCP Energy Analytics, said: “Unfortunately, we are going to see more high and volatile prices that consumers will pass on”.
Phil Hewitt, director of consulting firm EnAppSys, said with a tight margin already forecast for the winter, the reduced capacity on IFA1 put the UK market ‘in a risky position’.
Kent Fire and Rescue Service said Wednesday morning that more than 10 fire trucks were initially called after the fire broke out overnight. By noon, four fire trucks, two altitude vehicles and the technical rescue unit were attending.
Interconnectors – submarine cables through which Britain imports and exports electricity with countries such as Belgium, France, Denmark, Ireland and the Netherlands – have been playing an increasing role in balancing the electricity system in recent years, as the country has moved away from fossil fuel generation to more weather-dependent sources such as sea winds.
Britain currently has six operational connections with a capacity of 6GW. A seventh, connecting Britain with Norway, was turned on for testing in June.
The British government said in a white paper in December that by 2030 Britain needed at least 18GW of interconnections.
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