The sweltering temperatures and World Cup fever proved a potent combination for UK gas plants, as they were paid nearly £4 million to generate electricity during England's goalless draw against Ghana on Tuesday evening. Millions of football fans cranked up their kettles and other appliances, sending demand soaring by approximately 300MW at half-time and 225MW at full-time.
The National Energy System Operator (Neso) had to manage a significant jump in electricity demand, with experts attributing the surge to viewers switching on their cooling appliances and hot drinks. During breaks in the match, there was no discernible change in power demand - possibly due to the short duration and unfamiliar timing of the hydration breaks.
As solar power generation waned in the evening, gas plants were paid up to £1,000 per megawatt-hour to increase their output, a price 14 times higher than the average observed in June last year. Shivam Malhotra, head of power trading at LCP Delta, said these prices accurately reflect the current market scarcity and there was no evidence of price manipulation.
The system operator allocated about £2.9 million to import electricity from continental Europe to bolster Great Britain's power supplies, as European markets themselves struggled with outages and elevated demand due to the heatwave. In France, several nuclear plants had to reduce output due to high river water temperatures affecting reactor cooling processes.
The high-pressure weather system causing the heatwave has also led to lower wind speeds, impacting renewable energy generation. Neso issued a rare summer power supply warning for Wednesday evening, urging plant owners to maximise electricity generation as the heatwave intensifies further. This situation highlights the challenges faced by the UK's energy infrastructure in balancing demand, supply, and the transition to renewable sources during extreme weather events.
For UK businesses, especially those reliant on consistent and affordable power, these elevated prices could lead to higher operational costs. Households may also see an impact on their energy bills if the heatwave persists and leads to sustained high wholesale electricity prices. The Bank of England closely monitors inflation, with rising energy costs contributing to inflationary pressure.