Business Energy Broker
The IFA Interconnector from England to France has been shut down following a fire and sent the energy market soaring with near 20% price increases.
The National Grid has announced that the IFA (Interconnexion France-Angleterre) cable will be offline until 25th September, by cause of the fire and planned maintenance at the site in Kent. Additionally, half of the cable’s capacity (1GW) is expected to be unavailable until March 2022.
Following the announcement of the fire and resulting shutdown, the energy market has been devastated with skyrocketing prices across all contact periods.
Customers on the day ahead market were hit with an unprecedented near 20% increase on Wednesday and faced prices of over £400/MWh resulting in major financial impacts. Customers on the year ahead market and due to renew their contracts were also facing large increases with over £140/MWh.
As the UK is a net importer, we rely on importing supply to meet our total demand. Therefore, the shutdown of an interconnector has major effects on our energy market as it significantly reduces supply and the increases risk of not meeting total demand. Furthermore, France is the largest supplier of energy for the UK through the IFA and IFA2 interconnectors.
The IFA is a high-voltage, electric cable commissioned in 1986 that connects England and France to provide key import supply with a 2GW capacity. It is currently one of six commissioned UK interconnectors with the largest capacity:
The IFA2 interconnector has not been affected by the fire and will remain at full capacity to support the national grid to meet demand. The National Grid will continue its investigation into the fire and announce updates as necessary.
The month-on-month increase in the energy market was already sparking concerns for businesses as it increased financial pressure while the economy was recovering from global lockdown restrictions. The IFA shutdown only accelerates these concerns with market price volatility and demand will remain to grow as we approach the winter period.