Cornwall Insight has released its latest Power Market Outlook to 2030 that indicates increased interconnector exports to France in the late 2020s.
According to the report, Cornwall Insight said that it has changed its outlook due to “Increased interconnector exports to France due to lower French nuclear availability which leads to a higher price floor in the late 2020s.”
This analysis coincides with the UK’s aim to have at least 18GW of interconnection capacity by 2030. France is a key neighbour for importing and exporting energy and, due to issues discovered within France’s existing nuclear fleet and its lowest production since 1993, the UK exported vast sums of energy to main the country’s energy demands in 2022.
This was a reversal of the previous norm where France was Europe’s largest exporter of power. That change led to increased power prices in the UK which no longer benefitted from France’s stabilising role in its power prices, said Octopus Renewables Infrastructure Trust.
Cornwall Insight now believes that lower French nuclear availability could yet again increase prices towards the end of the 2020s.
Prices are also expected to drop in the mid-2020s as showcased in the chart above. This is expected to occur as higher marginal cost coal-fired plants retire and new offshore wind turbines are built in order to meet the government’s 2030 wind generation target of 50GW.
As well as offshore wind, solar and onshore wind capacity will increase over the period to 2030 as cheap generation options (on a levelised cost basis) are utilised to meet decarbonisation targets and rising demand.
Alongside this, as the UK approaches 2030, the deployment of low marginal cost generators is expected to be met by demand growth from the electrification of the economy, increasing production of green hydrogen and increased power exports to Europe, resulting in the levelling of prices above pre-pandemic levels, Cornwall Insight said.
Cornwall Insight also released its latest price cap prediction today (9 May) showcasing a £38 swing since March 2023. A typical house is now predicted to pay roughly £2,062.91 a year from July (Q3 2023) – up from the organisation’s April prediction of £2,024.58 for the same quarter.
