- January 31st, 2014
National Grid says UK set to import more electricity
The UK will import more power from neighbouring countries in the future as the country’s electricity margin continues to tighten, according to National Grid.
“There will be a rise in power imports,” said Andrew Bonfield, National Grid’s chief finance officer. “This is because there is a pricing differential which we believe will be beneficial to the country, and ultimately customers.”
Electricity imports can be cheaper than those produced by UK suppliers and are a small but growing part of the country’s overall power supply. Power is produced in France and the Netherlands and imported via interconnectors. Electricity flows both ways but the UK currently buys more than it sells.
Net electricity imports cost the UK about £365m in the past six months of 2013, two and a half times more than two years previously, according to data supplied by ICIS, the price reporting agency.
Swiss engineering group ABB last year commissioned a 262km interconnector to link Ireland’s grid to the UK’s. National Grid is also working on interconnector projects with Belgium, Denmark, Norway and Iceland. About 5-7GW of additional capacity could flow from the new interconnectors over the next decade or so, said Mr Bonfield. However, some of the interconnector projects are more feasible than others.
Power imports should help National Grid level out peaks and troughs from renewable energy production and deal with the UK’s diminishing electricity margin, which represents the safety cushion of spare power generating capacity. National Grid previously said that the electricity margin during peak demand in cold weather will be 5 per cent, down from more than 15 per cent in the winter of 2011-12.
National Grid will invest about £3.5bn this year, most of which will go towards reinforcing its UK transmission infrastructure.
The company said that its networks were performing well in spite of “challenging weather conditions” in the US north east, where it owns and operates several power stations. But while Hurricane Sandy cut off 1m of National Grid’s customers and cost the company £130m in 2012, this winter’s cold snap only affected 150,000 customers. Weather-related costs therefore would be much lower this year, said Mr Bonfield.