Energy prices have hit an all-time high after a large fire forced the shutdown of the IFA interconnector, which links the British and French power grids.
National Grid has clarified that 1GW of capacity is unavailable until 27th March 2022, raising concerns over tight supplies in the coming months.
The outage comes at a difficult time for the UK power market, with consumers already facing the biggest spike in energy prices in over a decade.
Following the incident, natural gas rose by around 18% to 189p/therm, more than double the amount paid two months ago and a fourfold increase on September 2020.
Analysts have warned prices could soar further over the next couple of days following the blaze.
Data from EnAppSys shows that in the year to date, overall average power prices have been more than double the average price in 2019/20. In the last two weeks, daily average prices have been eight times the average in 2019.
Phil Hewitt, Director of EnAppSys, said:
“This fire at IFA1 is a major event; we could be looking at an extended outage. In the long run, we will lose 2GW of import to the GB markets whilst we are struggling at the moment with low margins. The immediate effect is that since IFA was on half capacity anyway, we have only lost 1GW for this current period of extreme prices – it was due to return to full import at the weekend.
Today the tight market will be affected. Tomorrow a forecast tight market will become really tight; expect even higher prices in the spot markets going forward.”