Grid pays close to £1,000 per MWh as low wind forces imports

Britain's electricity system came under severe strain after several days of very low wind and a shortfall in forecast wind output, according to an energy consultant's account of events. Wholesale gas prices had normally been around £80 per megawatt hour in recent years. They rose to £171 per megawatt hour before the balancing mechanism intervened, with the grid paying close to £1,000 per megawatt hour at the worst point.

At the peak of the incident, the country was importing 22% of its electricity. The consultant said that without those imports the lights would have gone out. The costs will feed into consumer bills, though not necessarily the next bill.

NESO, the system operator, issued capacity warnings during the day. The consultant rejected the idea that these were routine. She said warnings about capacity margins in October are not normal, and neither is a capacity shortfall lasting eight hours. The original shortfall period ran from 3pm to 11pm, later reduced to 4pm to 11pm. Warnings were first issued around midnight and updated about seven hours later, when the shortfall had increased.

Wind output this month was about 40% below the seasonal average. On the day, wind output was about 40% below the day-ahead forecast, a difference of 1,400 megawatts. Demand was more than 900 megawatts lower than expected, which helped the system. Even so, the net detriment was about half a gigawatt.

NESO had to rely on imports. Imports at the peak were lower than in the morning. The system had been set up to export through the evening, and NESO was forced to buy those exports back. The volumes far exceeded EU trading limits. The cost of that is not yet known. The rest was found through the balancing mechanism at close to £1,000 per megawatt hour. Total balancing costs for the day will probably exceed £15m, compared with a normal daily average of about £2.3m.

The discussion also turned to energy policy. The presenter criticised past ambitions to make the UK a 'Saudi Arabia of wind' and plans to fill the North Sea with turbines. He questioned whether renewables had left the system exposed when the wind does not blow. The consultant said renewables are part of the future and noted that China and the United States are adopting them. She argued the UK needs a range of energy sources, including nuclear, gas, oil, wind and interconnectors, but the presenter said importing nearly a quarter of electricity showed there was no strength in the system.

Political blame was exchanged over net zero, subsidies and industrial energy prices. The presenter said questioning net zero should not be treated as populist. The discussion covered whether the government was changing the system to take account of bill payers. The presenter asked whether it was fair that UK industrial and domestic energy prices were among the highest in comparable countries. The consultant said high industrial costs were a problem and that the balance had to be found. She is due to return next week to discuss how to prevent blackout risks over the coming winter.