UK electricity prices are now the most expensive in Europe
A fire at Britain’s main electricity subsea cable with France has impacted imports to the UK, causing an upwards surge in prices when supply issues have already brought about record highs.
National Grid, whose share price is down by 0.73% on Wednesday, confirmed that the fire broke out at a site near Ashford in Kent.
The recent highs in energy prices are expected to go even higher over the next year and could put the futures of a number of energy companies in doubt.
On Wednesday, the market price at a major UK electricity auction reached £2,500 per megawatt-hour, a record price. It compares to a typical baseload price of around £40 per megawatt-hour during 2019 and 2020.
Glenn Rickson, head of European power analysis at S&P Global Platts Analytics, says the disruption caused by the fire has the possibility to exist “for weeks, maybe months”.
“It couldn’t come at a worse time for the UK and I would expect [electricity prices] to spike strongly, even relative to the new records seen this week,” he added.
The UK has seen electricity prices rise to record highs over recent weeks, and are now the most expensive in Europe.
Britain has specifically come under pressure due to its reliance on renewable energy and gas to generate electricity.
Unideal weather conditions have reduced the energy that can be gathered using wind turbines.