Britain produced its highest level of gas-fired electricity generation since 2011 in the third quarter of 2022, according to new analysis from EnAppSys.
During Q3, Britain produced 31TWh of gas-fired power helping to meet the demand from Europe through interconnectors with France, Norway, Belgium and the Netherlands, as well as its own.
France is still struggling with nuclear fleet outages due to stress corrosion cracking problems. This problem was compounded by periods of drought over Q3 which limited river water cooling for reactors. The drought also impacted Norway’s hydro generation.
Additionally, gas prices in Britain remained lower than in mainland Europe, where there is greater reliance on Russian gas. These factors led to Britain being a net exporter of electricity for the second quarter in a row.
“This quarter saw increased pressure in the GB electricity market as gas prices resumed their escalation, having fallen in the first half of the year following the initial spike in prices at the outbreak of the war in Ukraine. The consequent increase in generation costs during Q3 led to a rise in wholesale power prices, with all-time high averages for day-ahead, within-day and system prices,” said Paul Verrill, director of EnAppSys.
“Nevertheless, gas prices and electricity generation costs were generally more favourable in GB than in mainland Europe, so GB remained a net exporter this quarter. This was primarily due to GB’s lower dependency on Russian gas imports than other European countries. Most of GB’s gas is produced in the North Sea, while imports come mainly from Norway. LNG imports come from Qatar and the US, meaning that very little GB gas has historically come from Russia. This means that GB has been more shielded from the worst of the recent gas spikes than many of its European neighbours which do not have LNG import facilities.”
British gas prices peaked at £187.36/MWh in late August due to uncertainty in gas suppliers.
In July, Russia shut down the Nord Stream 1 pipeline’s gas flows to Germany for maintenance for ten days. Following this gas flow was limited to 20% of capacity through August. But in September, gas flows were halted indefinitely.
At the end of September, gas leaks were noted at both Nord Stream 1 and the unused Nord Stream 2, with the pipelines likely to remain out of use for an extended period.
Because of these factors, gas prices climbed from £55.65/MWh at the close of Q2 to a peak of £187.36/MWh in late August. By the end of Q3, gas prices had fallen back to £61.45/MWh as European gas storage units had been filled.
The increase in generation costs due to the growth in the gas prices led to wholesale power prices also growing across the quarter, with all-time high averages for day-ahead, within-day and system prices according to EnAppSys.
Across Q3 wind generation was higher than the same period in 2021, although around 1.6% less than Q3 2020 and 15.3% less than Q2 2022.
Coal generation increased, with just fourteen days in which there was no coal on the system. This put generation higher than Q3 2020, but less than Q3 2021 by 2.6%.
Gas made up almost half of Britain’s fuel mix between July and September, accounting for 49.2%, while renewables made up 40%, nuclear 16.3%, coal 1.8%, while net imports were -7.4%.
