Workers at state-controlled French utility giant EDF continue to strike in protest to planned restructuring work. Almost 7GW of generation capacity has been curtailed as workers at several nuclear, hydro and gas-fired power plants protested against the changes on Thursday 17th October.
Supply Concerns and The European Energy Complex
French demand data shows peak demand, a measure of the maximum system requirement during the peak period typically between 5pm and 7pm, at around 56GW. With strikes impacting over 10% of this supply the question on everyone’s lips is: just how concerned should France and Europe as a whole be?
At the moment, there’s little cause for concern; it is merely a cost to EDF which imports its supply shortfall from other sources, undoubtedly at a cost. This represents a similar impact to the initial demonstrations on 9th September when more than a third of EDF workers downed tools and, on this date, there was little effect on the markets.
It does however present a more significant concern as we move further into winter and periods of severe system strain, typically driven by the weather, impact the network. Should union members seek the maximum impact from these planned strikes by aligning with forecasted periods of system strain, then the threat of price spikes becomes a likelihood, and this could soon be factored into forward prices.
Power prices in the UK are especially linked to those of its Western European neighbours and with the 2GW IFA interconnector between the UK and France so extensively used for balancing national supplies we could soon start seeing the effect on the UK wholesale power market.
UK Future Supply Mix – Advantageous Diversity or Over-reliance?
The link between European power markets will only grow further with future interconnection projects increasing the link between us, the continent, and France especially, over the next few years.
|PROJECT NAME||CONNECTING COUNTRY||CAPACITY||PLANNED COMMENCEMENT DATE|
Planned interconnector projects (Source: Ofgem)
It has long been said that one of the UK’s strong points in how it meets national power demand requirements is its diversity of supply. However, clearly with dwindling North Sea gas reserves, ageing fossil fuel generation fleets, as well as increased flows to and from mainland Europe, this could shift the balance.
Overall, while it does emphasise the need to keep abreast of European market news, the dawning of a renewables dominated power grid should more than plug the gap in the future and, should the intermittency concerns be addressed, serve to further add much needed security of supply. One to be wary of this winter perhaps, but less so in future years.