UK 'at risk of electricity blackouts by 2015' due to EU's green laws and power station closures
Britain will soon be at serious risk of letting the lights go out, the energy watchdog warned today, as it forecast a possible electricity supply shortfall within three years. Rigid European Union environmental laws and the closure of oil and coal power stations are cutting off supplies and slashing spare capacity in the UK power system, an Ofgem report said. The regulator predicted that by 2015/16 there will be just a 4 per cent buffer in UK energy supplies, compared to the current level of 14 per cent spare capacity.
This will make the country ever more reliant on imported gas – which will probably lead to price increases at the same time as risking Britain’s self-sufficiency. Audrey Gallacher, Director of Energy at Consumer Focus, said of the report: ‘While there is enough generation capacity to mean that widespread power-cuts are still unlikely, narrower margins mean the risks of outages are higher and scarcity of energy could also feed into possible price rises in future.
But National Grid would cut power to businesses and industrial customers before households, which significantly reduces the risk of families being left in the dark, according to Ofgem. It also has contingency plans in place to avoid interrupting supply to customers, by asking power stations to maximise generation and also by importing more power from Europe.
The Government is also looking at plans to pay gas-fired stations to ensure they are on stand-by to generate enough demand whenever required to boost the spare capacity.
The Government welcomed today’s report and said it hoped reforms as part of its forthcoming Energy Bill would ensure supply was secured. Edward Davey, State for Energy and Climate Change Secretary, said: ‘Security of electricity supply is of critical importance to the health of the economy and the smooth functioning of our daily lives.
‘That is why the Government is reforming the electricity market to deliver secure, clean and affordable electricity.‘Mike Clancy, general secretary designate at union Prospect, said: ‘This report highlights how imperative it is for the Government to act now and introduce electricity market reform that ensures the programme of new nuclear build and other vital energy infrastructure projects, such as carbon capture and storage, are attractive enough to secure the long-term investment they require.’
But Greenpeace policy director Doug Parr said the report ‘sends out a clear warning that we need to reduce demand’ rather than build new power stations.
‘Consumers need protection from price spikes as well as power cuts.‘Ofgem warned in 2009 that customer bills may need to rise by 14 to 25 per cent to pay for investment to increase Britain’s energy supply by developing more low carbon power stations. Alistair Buchanan, chief executive of Ofgem, said: ‘The unprecedented challenges facing Britain’s energy industry, identified in Ofgem’s Project Discovery, to attract the investment to deliver secure, sustainable and affordable energy supplies for consumers, still remain.‘WINTER WARNING Household fuel bills could soar this winter, with firms set to increase profits from each home by almost 50 per cent, from £45 to £65. SSE will raise the price of a typical dual fuel bill nine per cent from mid-October, from £1,172 to £1,274 a year. That rise will affect as many as 5million households. And British Gas has told 10million households that their bills could go up by as much as £100 next year. Earlier this month Scottish Power and First Utility also pulled their cheapest fixed rate deals. The removal of these tariffs has left consumers with a dwindling range of options that offer both the peace of mind of a fixed price coupled with no exit penalties. Experts have warned the average annual energy bill could rise by £118 to a record £1,428 next year.Today’s report reveals the UK could be left with a shortage equivalent to 1,000 households in 2015/16, or 9,000 households in extreme circumstances. It estimates the chance of network operator National Grid having to cut power to customers would stand at one in 12 in 2015/16.
This is Money
Author: Adrian Lowery