Q4 2017: Moving electricity across the channel

by Dr Iain Staffell – Imperial College London 

Electricity trade between Britain and France was exactly balanced, but still worth nearly £34 million this quarter. 

Since the interconnector between France and England was built, Britain has tended to import electricity from France. There have been periods when the power flows in the other direction, such as in Quarter 4 of 2016 when many French nuclear reactors were offline for safety tests. This quarter, the flows were almost exactly in balance with 1.57 TWh going in each direction.

The complex pattern of flows (see chart below) cannot be explained by looking at Britain alone. There is no correlation between the amount of power imported from France in each half hour and the level of electricity demand, wind and solar output, or wholesale electricity prices in Britain.

Flow are more strongly related to, but not completely explained by, the cross-channel difference in day-ahead electricity prices (see chart below right). The blue points show ‘efficient arbitrage’ – times when electricity is bought cheap and sold expensive. These trades earned around £36 million over the quarter, less the cost of using the interconnector.

There are also many periods when power appears to flow the wrong way (shown in red). 13% of Britain’s imports and 15% of exports were sent to a market where the price was at least £1/MWh lower than where the power came from. These wrong-way flows were smaller and less common, but still substantial. If the traders had bought and sold power in the two countries’ day-ahead markets, they would have lost £2.7 million, before deducting interconnector costs.

In practice, flows may have been agreed before the day-ahead prices were known. They may also be adjusted in response to real-time events that changed the situation after those prices were determined. National Grid sometimes have to counteract the profit-driven trades to preserve system security.

While the interconnector responds reasonably well to economic signals, does it 
respond to the system’s needs? There were eight half-hours with very high demand 
(over 50 GW) in which Britain exported power. This might be the ‘neighbourly thing to do’ if the French grid was under greater stress, but in four of those periods, the day-ahead prices suggest that traders would have lost money.

The interconnectors are taken into account in the government’s annual auctions 
for generating capacity. It would be silly to ignore them, but we should keep track of their actual ability to deliver electricity when required, as with any other power source. National Grid, as the electricity system operator, have the authority to directly control British generators if the situation calls for it. With interconnectors, power flows will follow the money.

Half-hourly power flow across the French interconnector during Quarter 4 (left). Imports to Britain are above, and exports to France are below the axis. The relationship between power flow between Britain and France and the difference in day-ahead power price in each country (right). Pro table trades are shown in blue, loss-making trades in red.

Authors: Dr Iain Staffell, Professor Richard Green, Dr Rob Gross and Professor Tim Green.