Traders face two more months of UK-France electricity cable woes
Technical problems that have dogged the 2GW UK-France electricity interconnector since September look set to last until the end of March, stretching the chronic capacity curtailment issues to a full seven months.
Now, five capacity auctions that were scheduled for February have been cancelled, IFA cable operators National Grid in the UK and France's RTE said on Friday. The end-of-March warning was included in a notice sent out to some market participants earlier this week, ICIS understands.
At the UK end of the cable, the issue centres on damage to a reactor, for which repair "is proving to be a challenge", the note said. "It is a difficult environment and working methods must ensure the safety of our staff and equipment," it said. "Unfortunately, this is taking longer than expected and completion before the end of March is unlikely."
The note added that the market would be kept informed of progress.
The UK problem comes on top of "significant problems" that arose just days ago at the opposite end of the cable, as repairs in France were on the verge of completion.
Traders have hit out at the loss of arbitrage opportunities between the UK and French electricity markets (see EDEM 20 December 2012) - a loss all the more pronounced because the capacity issues have coincided with the prompt volatility peaks of winter. Some traders have reported financial losses in excess of £1m (€1.2m) to ICIS (see EDEM 10 January 2013).
The latest interconnector news alters the most recent schedule, published on 24 January, from UK transmission system operator National Grid and French counterpart RTE, which jointly run the cable.
The schedule said 2GW would be available on the cable from the start of March. "So now it's not only February - March will be bad as well," one disgruntled trader said on Friday.
Early fix unlikely
On Friday, the operators informed the market that five capacity auctions on the cable, scheduled for 5, 6, 13, 19 and 20 February, have all been cancelled.
The cancellations cover all delivery windows to the end of the first quarter, confirming the operators' fears that a fix before the end of March looks highly unlikely.
Both National Grid and RTE apologised to the market in a joint statement posted on 10 January, within hours of the publication of ICIS' story regarding £1m losses.
"We sincerely apologise for the recent faults and problems that have reduced our capability but wish to ensure that we are doing all we can to resolve the situation," it said, before detailing the technical issues involved. JS
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