British billpayers should brace for steeper energy costs this autumn after wholesale power prices reached record highs in the second quarter of the year. Day-ahead electricity prices were 15% dearer this spring than at the same time in 2020, with the average price across the quarter reaching an all-time high of £72/MWh, according to a report from EnAppSys. The imbalance price, which accounts for balancing costs, rose to £74.85/MWh, the highest recorded since at least 2011, when EnAppSys started collecting the data. The energy market analysts attributed this surge in prices to the easing of lockdown restrictions, lower output from renewables and several nuclear plants and cables linking our power grid to Europe being offline. With most large electricity users like manufacturing, offices, schools and shopping centres open this spring, power demand rebounded from its record lows last year to close to normal levels. But generation was down, leading to tighter margins and higher costs. Grey, windless skies led to a slump in renewables’ contribution. Green generation was down 25% from the first quarter of the year and down 9% from last spring. In total, renewables produced just under a third of all power between April and June. Nuclear generation was also down 4% from last year due to extended outages at Sizewell B, Hunterston and Heysham. Nuclear generation has been sliding since 2017, its share of the fuel mix contracting from one-fifth to just 16.4% as Britain’s ageing nuclear reactors are taken offline for maintenance and over safety concerns and as their successors remain mired in development. EDF announced last month that its Dungeness power station, offline since 2018 for repairs, won’t come back online and will move straight to decommissioning. Hunterston B and Hinkley Point B are already slated for closure in the next year and the French utility has warned that two more of its nuclear plants, Torness and Heysham 2, could soon follow. That would leave just one nuclear power station, Sizewell B, generating power until a new plant Hinkley Point C comes online in 2026.
Simply Switch 19th July 2021 read more »