Electricity prices in the United Kingdom surged more than five-fold during a recent heatwave, according to an analysis, highlighting challenges with renewable energy's ability to meet demand during periods of high consumption.
On June 26, the hottest day of the year, wholesale electricity prices jumped from an average of £83 per megawatt-hour (MWh) to £468/MWh. This price increase coincided with a significant reliance on electricity imports from Europe as domestic renewable sources, such as solar and wind power, were unable to generate sufficient energy to meet demand. During this period, households and businesses increased their energy consumption to power air conditioning units and fans.
Analysis revealed that at one point on June 26, imports accounted for 22 percent of Britain's electricity supply. Additionally, gas power stations provided a substantial portion of the energy, reaching up to 49 percent of the power generated between 11 p.m. and 11:30 p.m. when solar production was at zero due to darkness. Over the entire heatwave period from June 22 to June 27, gas supplied 35 percent of electricity generation, compared to 21 percent from wind and 13 percent from solar.
Critics argue that this situation demonstrates the vulnerability of the UK's energy system and points to the perceived shortcomings of policies aimed at phasing out domestic fossil fuel production. Greg Smith, the Tory shadow energy minister, stated that the UK's reliance on imports during peak demand periods forces the country to pay higher prices. He suggested that greater domestic production, including drilling in the North Sea, is necessary to ensure a stable and affordable electricity supply, especially as the climate heats up and demand for cooling increases.
The analysis also indicated that energy prices could have risen significantly higher under different conditions. If available gas capacity had been 1 GW lower on June 26, prices could have exceeded £750/MWh, and a 5 GW decrease could have driven prices to £1,636/MWh.
The Labour Party, which has pledged to cut household energy bills and has implemented a ban on new oil and gas drilling licenses in the North Sea, has stated that global gas prices are the primary driver of high energy costs. An Energy department spokesperson commented that increased domestic oil and gas production would not lower bills, advocating instead for greater investment in homegrown clean power.