UK interconnection links ‘most expensive in Europe’, consultants say

According to the consultants, the costs of transferring electricity volumes to or from the UK are now the highest in Europe. EnAppSys.

Analysts found that € 19.42 / MWh, the continent’s highest price, was the norm for exports from Belgium to Britain ordered during the Nemo cable from Zeebrugge to Richborough, for contracts concluded at monthly auctions on the Joint Allocation Office (JAO) Exchange platform.

Not far behind, the IFA1the cable to France attracted royalties of € 18.53 / MWh in May on the same platform. Co-owned by National Grid ESO and its French sister RTE, the wire goes from near Caen to Solent airfield, near Portsmouth.

The burden on UK producers forced to bear more transport costs than their continental counterparts, as well as an imbalance in carbon accounting, with support set at £ 18 per tonne equivalent, create a structural asymmetry identified by analysts.

EnAppSys Director Phil Hewitt further explained: “The order of merit determines which fuel source will provide electricity to the grid and is ranked based on the price and amount of electricity produced,” he said. he continued.

“Solar and wind are often at the top of the list due to the lack of fuel costs for generation. They are followed by nuclear production. Fossil fuels such as gas are often at the bottom of the order of merit ”.

Britain’s energy mix is ​​still influenced by a large amount of gas production. In May, Hewitt noted, 48% of Britain’s energy demand was met by gas.

“As gas is the fringe plant in Britain and gas plant operators spend around £ 8-9 more on carbon than their EU counterparts, as well as an average of £ 4-5 for balancing costs, this means that the price for interconnection capacity can be explained by the interconnections capturing the price of regulatory divergence between the two markets.

Learn more about the discoveries of EnAppSys here.

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