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Britain forced to fire up coal plant amid record power prices and winter squeeze

·4-min read
Power surge
Power surge

Energy prices have spiked to a record high in Britain after calm weather shut down the country’s wind turbines amid a global shortage of natural gas.

Wholesale power costs surged to more than four times their normal level, forcing officials to fire up coal-based plants to handle demand.

It is feared the high prices will continue into winter as the weather gets colder, raising fears over household bills and putting a string of energy suppliers at risk of going bust.

One senior energy insider said: “It’s causing a lot of concern. Everything is going up.”

Rising wholesale gas costs over the summer have already forced ministers to increase the price cap on energy bills by £139 from October, with suppliers hiking tariffs as a result.

Businesses have complained for years that they face higher energy costs than competitors abroad, and there are now warnings that manufacturers might curb output rather than incurring sky-high bills.

Rising wholesale prices come at a sensitive time for the Government as it tries to maintain public backing for its plans to slash carbon emissions to net zero.

Taxpayers and consumers are already facing further costs to fund technologies such as hydrogen as part of the battle to ditch fossil fuels.

Gas-fired power stations still generate more than 30pc of UK electricity.

Power costs are closely tied to gas prices, which this evening hit 134.5p per therm in the UK - compared to less than 30p per therm one year ago.

Electricity prices reached an all-time high of £240 per megawatt hour on Friday and were trading at £219.46 per MwH on the N2EX exchange on Monday morning.

The squeeze was worsened by a slump in wind output in the UK. It dropped as low as 474 megawatts, compared to a record of 14,286 megawatts on May 21, according to analysis by Bloomberg, as a three-day heatwave settled across much of England and Wales.

Wind now provides about 20pc of the UK’s electricity throughout the year, but this varies hugely day by day.

At 7pm this evening, real time data showed Britain was getting 45.6pc of its power from gas-fired turbines, 13.5pc from nuclear power plants, 5.5pc from wind and 12.3pc from interconnectors to the continent and Northern Ireland. 5.5pc was coming from coal.

National Grid ESO, which balances Great Britain’s power supply, asked EDF to switch on two coal-fired units at its West Burton A station this morning to help meet demand.

The UK has shut down most of its coal stations to cut carbon emissions, but some plants remain available to generate energy when needed. They are likely to be called on more often this winter as power supplies remain tight.

Joe Camish, an analyst at Cornwall Insight, said: “If we have any situations similar to today where there is very low renewables output and margins remain tight, we will have to probably rely upon older thermal assets to help ease those margins.”

High gas prices are leading to a resurgence of oil-fired and coal-fired power plants around the world, analysts warned in the Telegraph last week, dealing a blow to efforts to cut carbon emissions.

Glenn Rickson, head of European power analysis at S&P Global Platts, said yesterday: “Everyone assumed coal was on its deathbed, but the plants that are available are running very hard.”

Andrew Crossland, a fellow at Durham Energy Institute, said the situation highlighted questions over the country’s energy resilience as intermittent sources such as wind and solar take on a bigger share and domestic production of oil and gas is set to fall.

He said: “We can’t install enough wind to meet our needs. We’re going to need something else. I really think that debate needs to be not that coal is going away, but what and how are we going to replace it with, what mix of solutions?”

Energy UK, the trade body, said: “The price of gas has been at a record high in recent months as a result of global factors, which are out of energy companies’ control.

“The industry recognises the impact increased prices will have on our customers and is committed to providing extra support this winter.

“Continuing the low-carbon transition and further reducing our dependency on fossil fuels for our heat and power will not only help us meet climate change targets but remove the risk of being exposed to volatile international wholesale prices.”

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