UK power surges to record as sub-zero chill sends demand surging

UK POWER prices for Monday (Dec 12) jumped to record levels as freezing temperatures are set to cause a surge in demand, just as a drop in wind generation causes a supply crunch.

The day-ahead price settled at a record £674.78 (S$1,121.71) per MWh on the Epex Spot SE exchange with the price for 5-6 pm clearing at an all-time high of £2,585.80 per MWh. The Met Office has yellow weather warnings for snow and ice in place throughout the UK till Thursday.

Temperatures are set to drop as low as -3 degrees Celsius in London on Sunday night, boosting demand for heating. Power consumption is expected to peak at 46,695 MW at 5 pm on Monday, up from a peak of 42,930 MW on Sunday, National Grid data showed. 

The cold snap is expected to last for the next seven days across north-west Europe at the same time as the wind weakens, reducing power supplies. In the UK, wind generation will be almost zero on Sunday and very low on Monday before picking up on Tuesday, according to Bloomberg’s wind model.

German day-ahead power prices jumped 33 per cent to 433.93 euros (S$619.44) per MWh, the highest since Sep 13 while the French contract rose 40 per cent to 465.49 euros per MWh on Epex Spot.

The UK’s National Grid will be testing its tool that pays some homes to reduce consumption on Monday. The so-called demand flexibility service was almost needed on Nov 28 but was stood down. BLOOMBERG