Britain's Electricity Grid Turns to Neighbors as it Ditches Coal

As Britain phases out coal-fired power plants and shifts towards wind turbines and solar panels, its electricity grid is increasingly relying on imports and exports from neighboring countries. In January, National Grid's Energy System Operator paid up to PS179 per megawatt hour to import electricity from Denmark via the Viking Link, a 475-mile undersea cable that connects Jutland and Lincolnshire. This trade highlights Britain's growing interconnection with its European neighbors, but also exposes its electricity supplies to international political tensions.

Key Takeaways:

• Britain's reliance on importing and exporting electricity from and to neighbors is set to increase as the country decarbonizes its power sector by 2030.
• The UK imported a net 23.8 terawatt hours of electricity in 2023, or about 7.5 percent of domestic demand.
• Britain has imported PS2.9 billion worth of electricity from Norway since the first cable between the two opened in October 2021.
• The UK government wants to more than double its current 31.4 gigawatt wind capacity and almost triple solar power capacity by 2030.
• National Grid expects Britain to become a net exporter of electricity in five years if its renewable energy goals are met.
• Rising protectionism over electricity exports and complaints over post-Brexit barriers to British exports to the EU are testing the limits of Britain's ambition to increase interconnection with Europe.
• The UK's exit from the EU's single energy market has introduced new trading barriers, pushing up costs and threatening new investment.
• Britain's electricity exports to the EU will be heavily taxed from 2026 due to the combined effect of the EU's carbon border tax and Britain's split from the EU's emissions trading scheme.

Statistics:

• 10 electricity cables now link Britain to other European countries, including France, the Netherlands, Belgium, Northern Ireland, and the Republic of Ireland, Norway, Denmark, and Germany.
• The UK imported a net 23.8 terawatt hours of electricity in 2023, or about 7.5 percent of domestic demand.
• Britain has imported PS2.9 billion worth of electricity from Norway since the first cable between the two opened in October 2021.
• The UK's current wind capacity is 31.4 gigawatts.
• The UK government wants to increase wind capacity by over 60% to 53GW by 2030.
• National Grid expects Britain to become a net exporter of electricity in five years if its renewable energy goals are met.

Sources:

• RACHEL MILLARD AND JIM PICKARD, "Britain's electricity grid turns to neighbors as it ditches coal" (January 2024)
• Fintan Devenney, senior energy analyst at advisory firm Montel
• Ben Wilson, president of National Grid Ventures
• Adam Bell, director of policy at consultancy Stonehaven and former head of energy strategy in the UK government
• Pranav Menon, at Aurora Energy Research
• Simon Virley, head of energy at advisory firm KPMG UK
• Wood Mackenzie research on "wind drought" across northern Europe in March 2021
• International Energy Agency analysis on simultaneous low or high wind spells across Europe over the past 30 years
• Ofgem; Entsoe sources for interconnector data