The GB electricity market has become increasingly reliant on interconnection with other markets. In its 2023 Future Energy Scenarios , NG ESO said:
“To manage dunkelflaute periods, dispatchable thermal power plants (gas and/or hydrogen), depending on the scenario and year, are likely to be required. A combination of LDES (e.g. Compressed Air Energy Storage (CAES), Liquid Air Energy Storage (LAES), Pumped Hydro Storage (PHS)) and interconnectors will be required to manage the network during these periods.”
In other words, interconnectors are seen as key to managing periods of low wind output in an electricity system increasingly dependent on intermittent renewable generation.
But what if the markets at the other end of those interconnectors are also experiencing dunkelflaute conditions? As most of them (with the exception of Norway) share similar weather to the UK, and (with the exceptions of Norway and France) share similar wind-led de-carbonisation strategies, can we really rely on interconnectors to ensure security of supply? And what about the effects of energy nationalism which has been increasing since the war in Ukraine? Can we rely on countries being willing to export at all times when GB needs to import?
Cross-border electricity trading allows resources to be used more efficiently across wide regions, but they tend to increase prices in exporting countries while lowering prices in importing countries, which may be unpopular in countries which export more than they import (such as Norway). Britain is typically an importer, so is able to benefit from (slightly) reduced power prices, but analysis of historic interconnector behaviour indicates that quite often we import when we don’t need to and export when demand is high and imports would be preferable. In addition, the rules governing the behaviour of interconnectors do not guarantee they will import during times of electricity shortages – they could even export instead.
Some countries, in particular Norway, are expressing doubts about their commitment to trading electricity, and have passed laws allowing them to suspend exports under certain conditions. They are also considering imposing export taxes in order to prevent domestic prices rising too much, which may reduce the availability of exports. Other countries may take a similar stance if they face electricity shortages, but high weather correlation and many countries in northern Europe relying on wind power, means that several countries could face shortages at the same time and be unwilling to export.
There have also been well-publicised acts of sabotage against cross-border gas pipelines which leads to concerns over the security of all energy infrastructure.
All of this suggests that while interconnectors may benefit Britain under normal market conditions, they may not deliver at times they are needed the most, and that relying on them could be a risky strategy.
I have written a report: Interconnectors and their impact on the GB power market, which is currently out for peer review on the GWPF website here. I would welcome comments by the 13 May deadline.
Energy News Beat