U.K. Could Become Net Power Exporter to Europe in Five Years
(Bloomberg) -- Britain could become a net exporter of electricity to Europe as soon as 2026, according to S&P Global Platts.
The U.K. imports about 7% of its electricity from Europe now, but that’s set to reverse, in part due to new cables that will boost links with the continent. With Britain aiming to quadruple offshore wind capacity this decade, it could have excess power to send through those lines.
Power flows to where prices are highest. At the moment this is often Britain, particularly along the two cables from France. But prices are expected to rise in mainland Europe, especially in the biggest market -- Germany -- as coal, lignite and nuclear plants are closed down, according to Platts. That will alter the economics and flow of electricity.
The U.K. aims to cut greenhouse gas emissions to “net zero” by 2050, and importing supplies of low-carbon electricity from countries like France, Norway and Denmark is part of that plan. Yet with power demand set to double over the period, Britain is also bolstering its own supply, targeting 40 gigawatts from offshore wind by 2030.
The U.K. market is getting “structurally longer, while the whole of western Europe is moving in another direction,” said Sabrina Kernbichler, European power analyst at S&P Global Platts.
New interconnector cables will boost Britain’s links with Europe to 18 gigawatts from 8 gigawatts by 2030. There’s a “medium-term” possibility that the country will become a net exporter, according to Andreas Gandolfo, an analyst at BloombergNEF.
But it won’t last. While wind-power growth in the coming decade will depress prices in the U.K., the increased electrification of energy use will subsequently drive them up, he said.
Planned new interconnectors include:
- 1 gigawatt ElecLink to France due to start in summer 2022
- 1.4 gigawatt North Sea Link with Norway expected to start this year
- 1.4 gigawatt Viking Link with Denmark starting in 2023/2024
- 1.4 gigawatt NeuConnect cable with Germany starting 2023/24
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