Last week, with temperatures boiling, Britain came perilously close to blackouts when electricity demand nearly outstripped supply. Even as the weather cooled, underinvestment in the grid created a bottleneck that was equally as perilous.
On Monday 18 July, with parts of the country under a Red warning for extreme heat, electricity consumption spiked as Brits plugged in fans and the lucky few turned on their aircon.
At the same time, soaring temperatures reduced the efficiency of gas power stations and led to the swelling of transmission lines, reducing their ability to carry electricity. Analysts at Cornwall Insight also attributed the shortfall in supply to low wind speeds and summer maintenance at thermal units at power stations. Exports were also high to France, which is facing its own power crunch as many of its ageing nuclear power stations are taken offline for maintenance.
With demand forecast to exceed supply for two hours, grid operators in Britain issued two Capacity Market Notices, calling for available generating capacity to come online. Tight margins and Capacity Market Notices are usually seen during the winter, when electricity demand surges in response to cold weather and early sunsets.
Although the ESO later cancelled the notices and blackouts were averted, tight margins in the summer spell danger for Britain, as it faces both a winter of low gas supplies and predictions that this summer’s sweltering temperatures will become commonplace.
Luke Ansell, analyst at Cornwall Insight, said: “Rising temperatures across GB and Europe are a concern as climate change threatens to make these weather occurrences more frequent. Over the next few years, the market will need to evolve to manage resources and deliver a flexible system capable of coping with what is likely to be a long-term issue.”
The heatwave kept electricity prices high throughout Monday and Tuesday, with imbalance prices peaking at £774 per megawatt-hour at 19:30 on 19 July, Britain’s first 40-degree day. That’s the highest price seen since March, when gas markets were reeling from the shock of the invasion of Ukraine.
Prices spikes are “something our current market can ill afford,” Ansell said. Already Cornwall Insight has forecast that elevated gas and electricity prices will push household energy bills to over £3,200/year from October.
But even as temperatures cooled on Wednesday, there was no respite for the power grid. That day, a bottleneck in the grid left parts of East London short of power, Bloomberg reports.
Grid operators ultimately had to pay a staggering £9,724.54 per megawatt hour to import electricity from Belgium and keep the lights on in the capital. That price is more than 5,000% higher than the typical rate and five times the previous import record – set just two days before, during the supply crunch on melting Monday.
Just a tiny amount of electricity was bought at that rate: enough to supply just eight homes for a year. But it’s a troubling sign that the British grid had to turn to Belgium for that electricity. Had Belgian power stations not stepped in, the grid would have been forced to “undertake demand control and disconnect homes from electricity,” a spokesperson said.
It would have been more cost-effective for the grid to bring power from other parts of the British grid seeing surplus, for instance from wind farms in Scotland, argues Javier Blas at Bloomberg Opinion. But Britain hasn’t invested enough in its electricity grid, leaving them vulnerable to these bottlenecks that distort prices and could cause blackouts.
“At some point, even sky-high prices won’t be enough. Then, a blackout would belatedly lay bare the consequences of our under-investing ways,” Blas wrote.
Sources: Cornwall Insight: “Electricity demand close to outstripping supply during unprecedented heatwave”
Bloomberg UK: “How London Paid a Record Price to Dodge a Blackout”
