Britain becomes a net electricity exporter for the first time as European electricity prices remain volatile

The IFA2 interconnector (pictures) is one of seven linking Britain to Europe and Ireland. Image: National grid.

In the second quarter of 2022, Britain became a net exporter of electricity for the first time, according to new analysis from EnAppSys.

Due to a combination of factors, including the war in Ukraine, Britain’s position in relation to LNG imports into Europe and nuclear outages in France, the country exported 3.6 TWh in the quarter.

This equates to around 5.7% of UK power generation and a major country turnaround of 5.2 TWh in the first quarter.

Paul Verrill, Director of EnAppSys, explained that maintenance of gas interconnector assets with Europe and Ireland, Britain’s limited gas connection capacity and declining gas storage capacity, as well as the increase in LNG imports into Great Britain, have led to a relative excess of gas on the market.

This has led to low gas prices relative to the Continent, fueling a rise in gas-fired power generation in Britain, reaching its highest level since the first quarter of 2021.

“As a result of Russia’s military action in Ukraine, Russia’s gas supply to Europe has been significantly reduced and future plans for expansion, including a Nord Stream 2 gas pipeline between Russia and Germany, have been abandoned,” Verrill continued.

“This caused some uncertainty around the European gas supply, leading to a significant rise in gas prices across the continent in the aftermath of the invasion. Going gas prices had peaked at £208/ MWh on March 7, but fell back at the start of the second quarter to £86/MWh, falling further to end the quarter at £51/MWh.However, these prices were still significantly higher than those in Britain, where prices fell to £4.57/MWh on June 9.

These lower gas prices resulted in lower wholesale electricity prices in Britain than its neighbours, so the flow of electricity was mainly from the island to the mainland.

Prices in France were impacted by stress corrosion cracking in its nuclear units, which led to the stoppage of many appraisals. This decrease in supply has further increased the country’s need for imports from Great Britain.

Gas-fired CCGT remained the largest contributor to the UK energy mix during the second quarter, with 29 TWh of total generation, the highest level since the fourth quarter of 2019. And this despite the fact that wind production reached its highest level of any second quarter period on record with 15.8 TWh of generation – and reaching a new record on May 21 – and demand falling to its lowest level since the third quarter of 2020.

Nuclear production in the quarter was 12.1 TWh, its highest level since the fourth quarter of 2020, and coal production remained weak, with no production for more than a month during the second quarter of 2020. It There have recently been concerns about the continued shift away from coal, and Drax and EDF have agreed to keep coal-fired power stations online through the winter at the request of the government.

Wholesale power prices were down around 20-30% from Q1 2022, but still around double those seen in Q2 2021. Daily prices averaged £155.28/MWh for the EPEX auction and £153.37/MWh for Nordpool.

Paul Verrill said: “When gas prices fell on Saturday June 11, daily prices fell to quarter lows of £0.44/MWh for EPEX and -£2.49/MWh for Nordpool. These are the lowest daily prices seen since early January, before the start of the war in Ukraine. This highlights the effect that low demand, high wind generation and strong levels of gas supply can have on the market when combined with energy infrastructure capacity in the UK market.

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