Spike in balancing costs last week ‘driven by lack of southeast transmission and high European power prices’

NGESO bought power from the Europe on 20 July at a prices of over £9500 because of a combination of lack of capacity around London and high prices in Europe because of power outages there, the system operator said.
In an industry briefing the system operator said that during the period – early evening on 20 July – electricity prices in Europe were at a peak, because gas prices had spiked there and French nuclear units were offline. Meanwhile, relatively low gas prices in GB meant electricity was being generated here and exported across interconnectors, with France, Netherlands and Belgium interconnectors all at maximum capacity.
All three interconnectors are in the southeast, and simultaneously demand in the London area was increasing (partly due to air condtioning load). However, the network required to move GB power into the area (across the so-called LE1 boundary) was limited by unexpected transmission line outages in the southeast. Other issues in the mix included power stations in the southeast in outage, low wind generation in the region and lower transfer capacity in cables due to the heatwave.
There was no shortage of power in other areas of GB, but it could not be transferred to the southeast; to balance southeast demand and supply NGESO said it had to ‘pull power back’ from the interconnectors.
The system operator had to pull back 3.8GW in the peak period, which it said was “not unprecedented” and compared to around 3GW in a period the day before. Normally it receives offers from around 20 parties to fill similar needs but in this period the lack of transfer capability around London reduced the options and the system operator said it “had to pay the continental scarcity price”.
The result was balancing costs of around £64 million on 20 July. Other days in the week were also above average, with four days between £10 million and £19 million.

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