Recent heatwave causes UK electricity price jump
Demand for air conditioning causes a steep hike in wholesale electricity prices across the UK
Last week’s heatwave created an environment which caused the wholesale price of electricity to reach a 10 year high in the UK, in what one industry expert called an almost “perfect storm”.
The unexpected September scorcher drove up demand for power across the nation as businesses and homeowners cranked up their air conditioning systems and switched on their electric fans.
Couple this with poor wind power due to the humid temperatures; the beginning of scheduled maintenance work at a number of gas power stations across the country; and the unplanned temporary switch-offs at other gas power stations, and it really did culminate in a “perfect storm” of electricity shortage.
Power stations supply the National Grid with electricity, which is then sold at the day-ahead price to energy suppliers, who then supply businesses and households.
Last week during the heatwave, the day-ahead price for electricity rose from £40 per megawatt-hour to just under £200 per megawatt-hour. The highest the the day-ahead price has been for over a decade.
The demand for power across the UK is higher than average for the month of September due simply to the unseasonably hot temperatures, which have been especially high in the south of England. Electricity demand has not been so high since April, when a unusually cold spell of weather increase demand again.
To make matters slightly worse, the UK has been unable to transfer power from the French grid, which is usually the solution in such circumstances. A fault on a crucial power line which connects the UK and French networks has made this impossible.
However, despite admitting that the nation’s electricity reserve was “a little tight”, a spokesperson for the National Grid said the situation was “completely manageable”.
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