Britain may struggle to find the electricity supply it needs to meet demand even before the heating season officially begins as utilities complete maintenance at power stations before winter.<\/p>\n
Availability of gas-fired generation is set to drop to the lowest since April 2009 this month as companies from SSE Plc to RWE AG halt plants before the peak demand season, according to S&P Global Platts. The looming scarcity of gas plants, that at times generate half of the nation\u2019s supply, plus falling fuel costs have pushed the stations\u2019 profitability to a six-year high.<\/p>\n
The U.K.\u2019s supply margin has declined to near the lowest in a decade. For this winter, National Grid Plc has contracted 10 power stations to provide back up electricity, but the contracts don\u2019t start until November. U.K. utilities have closed coal plants that made up 9 percent of total generation capacity in the past year, leaving the nation\u2019s power supplies vulnerable on cold days with little wind.<\/p>\n
\u201cGas is running more often than it was a year ago and outages now have more of a price impact,\u201d said Glenn Rickson, the London-based head of power analysis at S&P Global Platts, an energy information provider. \u201cOctober is even more risky as it\u2019s colder and there will still be some plant offline for maintenance in the coal and gas fleet.\u201d<\/p>\n
Month-ahead clean-spark spreads, a measure of gas-plant profit margin, jumped in August to more than 17 pounds ($22) a megawatt-hour, the highest since 2009, according to data from ICE Futures Europe.<\/p>\n
Supply Backup
\n\u201cIt isn\u2019t unusual at this stage in the year for the forward margin between supply and demand to appear tight during September and October,\u201d National Grid said by e-mail. \u201cAs we get closer to the time, we would expect the market to respond and demand forecasts to become more accurate.\u201d<\/p>\n
Average gas-fired capacity may be as low as 18.2 gigawatts, compared with 21.1 gigawatts in August, according to Platts\u2019s forecast.<\/p>\n
While there\u2019s a risk of supply shortages in September, Rickson said he\u2019d be surprised if the network operator runs out of commercial tools and the lights go off.<\/p>\n
One operator set to benefit from the high spark spread is Ireland\u2019s Electricity Supply Board, which is connecting its 880-megawatt Carrington station to the grid on Sept. 18.<\/p>\n
It\u2019s the U.K.\u2019s first new gas-fed plant since 2012.
\nNational Grid more than doubled the amount of capacity it will keep in reserve this winter in order to keep margins steady at 5.5 percent. Stations in the so-called supply balancing reserve are required to be available on weekdays between 6 a.m. and 8 p.m. from November to February, according to the grid\u2019s website.<\/p>\n
Even a \u201cmoderately cold winter\u201d would increase the likelihood of National Grid needing to use its backup tools, pushing up power prices, according to Felix Chow, a project manager at Aurora Energy Research Ltd. in Oxford.<\/p>\n
\u201cUnpredictable variations in weather and plant availability means the capacity margin this winter could potentially be as low as 2.5 percent,\u201d he said.<\/p>\n
–<\/p>\n
Source: Bloomberg<\/p>\n","protected":false},"excerpt":{"rendered":"
Britain may struggle to find the electricity supply it needs to meet demand even before the heating season officially begins as utilities complete maintenance at power stations before winter. Availability of gas-fired generation is set to drop to the lowest since April 2009 this month as companies from SSE Plc to RWE AG halt plants […]<\/p>\n","protected":false},"author":7,"featured_media":244758,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[107],"tags":[],"class_list":["post-244756","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/244756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=244756"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/244756\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/media\/244758"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=244756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=244756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=244756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}