U.K. electricity prices surge as supply shortages hit Europe

In Britain, Bloomberg Electricity prices had risen, driven by power supply shortages. An auction for U.K. intraday power prices cleared at 2,000 pounds $2,762 per megawatt hour from noon to 12: 30 p.m local time, as a shortfall in power in Ireland exacerbated near record-high prices across Europe.

The intraday price was more than nine times higher than late morning power values at 8 a.m. Thursday, highlighting the extreme volatility in electricity markets that will likely get worse as demand increases this winter.

Ireland, which generally exports wind power to the U.K. frequently faced acute supply shortages and issued a warning earlier Thursday that the country could face blackouts. The Moyle Interconnector, which sends electricity across the Irish Sea from Scotland to Northern Ireland, was halted to stop exports.

That helped drive the intraday price above 1,000 pounds from 11 a.m. to 12: 30 p.m. which is nearly a fivefold increase from 8 a.m. well before usual night demand peak.

Record-high gas prices are being driven by tight supply that likely won't ease much in Russia until a new pipeline from Europe begins operating. At the same time, the U.K. is seeing a dearth of wind speeds that would normally be providing more renewable power to the country grid.

Electricite of France SA asked National Grid Plc to prepare two separate units from its West Burton B gas-fired power plant in case they are needed. Both facilities are offering their services for about 4,000 pounds, so this would be an expensive option.

The imbalance price was 940 pounds a megawatt-hour at 10 a.m. that s the cost generators have to pay if they have an unplanned outage or can't deliver on the power they had agreed to send to the grid.

EDF s Humber Nuclear plant is delayed, while two CGM units and the Heysham Center are also experiencing unexpected outages.