Why have Britain’s energy costs soared and what does it mean for Labour?
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Claims that power plants are gaming the system to charge huge sums to switch on in the UK’s cold weather. A rise in electricity costs this week has raised fears that officials operating Great Britain’s power market could be held to “ransom” by owners of gas power plants during cold, windless days in order to keep the lights on. Here, we look why costs have increased sharply, the trading rules for plants and the implications for Labour’s clean power ambitions.
![[Rye House power station]](https://i.guim.co.uk/img/media/2c915c871bf4e4e6a8928ef76908213695fc24f9/0_267_6636_3985/master/6636.jpg?width=445&dpr=1&s=none&crop=none)
Britain’s energy grid has becoming increasingly dominated by wind power, which reached new records for clean power generation last year. But the grid operator was forced to pay more than £20m to safeguard Britain’s electricity supplies on Wednesday when high demand for electricity combined with low wind speeds,, increasing the reliance on gas power plants.
Industry experts believe that costs could reach similar levels on Friday as freezing, windless weather drives prices in the UK’s wholesale electricity market higher. Market data has revealed that £17.8m, or almost 90% of Wednesday’s costs to balance supply and demand, were handed to just two gas power plants after they said they would not run unless they were paid rates up to 100 times higher than normal market prices.
The Connah’s Quay gas plant in north Wales raked in revenues of £10.3m from the grid operator’s balancing payments on Wednesday, while the Rye House gas-fired power station, just north of London, received almost £7.5m. There were concerns raised over Britain’s gas supplies, too. On Friday the owner of the UK’s biggest gas storage site, Centrica, warned that its inventories were “concerningly low” after an early start to winter, and colder than average temperatures, caused its stocks to fall by half leaving less than a week’s worth of gas available. The government insisted that the UK’s gas supplies will meet winter demand.
