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Fire in cable from France sends British electricity prices soaring

A fire in a cable connecting the British and French power systems sent already overheated British electricity rates soaring Wednesday.

National Grid, the British electric power company, said that the fire had occurred at a facility in Sellindge, near the English Channel, and that the cable would be out of service for about six months.

The cause of the fire was said to be under investigation.

The Kent Fire and Rescue Service said Wednesday morning that it was fighting the blaze with as many as 12 fire engines and making “progress,” though firefighters were expected to remain on the scene for hours.

News of the outage jolted the markets. A measure of wholesale electricity, British day-ahead power prices, reached as high as 481.88 pounds per megawatt-hour, according to Epex Spot, a trading platform. That level is several times what is normal, though prices had been soaring in recent days.

Another strand of the cable, known as an interconnector, is down for maintenance until Sept. 25. Together, the two outages involve enough electricity to power two million homes, according to National Grid.

A National Grid spokesman said the company had arranged sufficient backup power to get through the peak evening period on Wednesday.

Britain normally imports 3 gigawatts of power from France, enough to supply three million homes, the spokesman said.

The bizarre events on Wednesday illustrate how electric power systems are under pressure from the closing of conventional plants powered by coal and nuclear, and the growing reliance on renewable energy like wind and solar, whose output can vary according to the breeze and the sun.

These factors, and the increasing demand for energy as the economy recovers from the pandemic, have left Britain with slim spare capacity in electric power generation.

Adding to the uncertainty, breezes of late have been feeble, cutting the production of electricity from Britain’s many offshore wind turbines.

Losing the cable will further squeeze the power grid at an inopportune time, analysts say. Prices of natural gas, the fuel for plants that provide power during times of peak demand, are already at very high levels. Part of the reason is that Europe has not built up reserve storage of gas for the winter, because of high consumption in China and elsewhere.

Natural gas futures rose more than 6 percent on Wednesday.

“This incident has put more pressure and reliance on flexible generation sources, such as coal, gas and batteries, to ensure the lights are kept on,” said Catherine Newman, chief executive of Limejump, a company that manages large-scale batteries and other devices used to balance the power system.

The situation means that National Grid, the British grid operator, needs to press standby sources of generation, like high-polluting coal-fired plants, into service, often paying high prices.

As a result, energy prices are likely to rise further for consumers in Britain and elsewhere in Europe, where the effects of high natural gas prices are being felt. Britain’s energy regulatory agency, Ofgem, has already notified consumers that ceilings on some standard energy rates will be raised 12 percent.

Industry is being squeezed as well. Gareth Stace, director of UK Steel, a trade body, said in a statement on Wednesday that “extortionate prices are forcing some U.K. steelmakers to suspend their operations” during periods when prices soar. The high prices are signs of an “unhealthy” energy market, he said.

Consumers all over Europe are being squeezed by high energy prices. On Tuesday, Spain’s government, facing political pressure, announced measures to protect angry consumers.

In addition, the incident is a reminder that despite having left the European Union, Britain remains dependent on member countries in many ways, including for imports of energy.

The British power system is linked to France, Ireland and other European countries through large-capacity undersea cables. The idea is to send power back and forth between grids to balance the systems.

Of late, analysts say, the flow from France has been mostly one way, as Britain takes advantage of relatively inexpensive nuclear power generated elsewhere.