LONDON: Britain's wholesale natural gas and power prices rose on Wednesday morning as the system was tight due to low pipeline inflows, a drop in wind power output and significant nuclear power outages.
Prices for immediate delivery were trading at 39 pence per therm at 0745 GMT, up 0.35 pence or around 1 percent since their last settlement. Prices for delivery on Thursday were up 0.55 pence at 39.15 pence per therm.
"Lower wind capacity expected Thursday means that gas power stations will have to step in to meet demand, so that's been a bullish factor. Additionally, pipeline flows from Norway remain pretty low due to maintenance work in the North Sea, leaving the system a little undersupplied," one trader said.
Meteorologists said they expected British wind power capacity to drop from around 3,000 megawatt (MW) on Wednesday to little more than 1,000 MW on Thursday, with the shortfall expected to be met by gas-powered electricity generation.
Britain's gas demand was expected to be 153 million cubic metres (mcm) on Wednesday, National Grid data showed.
With flows forecast at 144.7 mcm, the system would be 8.3 mcm undersupplied.
The expected fall in wind power output also affected the British wholesale power market, where the system was also tight.
Britain currently consumes around 30,500 MW of power per day. With almost 3,000 MW of nuclear capacity off line, the system is relying heavily on gas, wind and imports to meet demand.
"With wind output falling in the next 24 hours, that means gas and import interconnectors have to step in," one utility trader said.
"With gas prices already up and the need to attract power imports from continental Europe, power prices are also headed up this morning."
Grid data showed that Britain is currently importing 2,000 MW of power from France and another 1,000 MW through the interconnector with the Netherlands.
Power prices for baseload (24 hours) delivery on Thursday were up 2.35 pounds per megawatt-hour (MWh) to 39.65 pounds a MWh.
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