Power shortage risks by 2015, Ofgem warns

 
The coal fuelled Ferrybridge power station The regulator said coal-fired power stations would be closing sooner than expected

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Britain risks running out of energy generating capacity in the winter of 2015-16, according to the energy regulator Ofgem.

Its report predicted that the amount of spare capacity could fall from 14% now to only 4% in three years.

Ofgem said this would leave Britain relying more on imported gas, which would make price rises more likely.

The government said that its forthcoming Energy Bill would ensure that there was secure supply.

Ofgem blames the risk on coal-fired power stations being closed sooner than expected and EU environmental legislation.

The warnings come in Ofgem's first annual Electricity Capacity Assessment.

It comes three years after Ofgem's Project Discovery report, which warned that electricity shortages could lead to steep rises in energy bills.

It is now saying the highest risk of shortages would be sooner than expected because coal-fired power stations would be closing sooner than it had predicted in 2009.

'Unprecedented challenges'

The regulator said more investment was needed in building fresh generating capacity.

Start Quote

Consumers need protection from price spikes as well as power cuts”

End Quote Audrey Gallacher Consumer Focus

"The unprecedented challenges in facing Britain's energy industry… to attract the investment to deliver secure, sustainable and affordable energy supplies for consumers, still remain," said Ofgem chief executive Alistair Buchanan.

"Ofgem is working with government on its plans to reform the electricity market to tackle these issues."

Energy Secretary Ed Davey said the government would respond to the report before the end of the year.

"Security of electricity supply is of critical importance to the health of the economy and the smooth functioning of our daily lives," he said.

"That is why the government is reforming the electricity market to deliver secure, clean and affordable electricity."

Ofgem's Ian Marlee: "There is an increased risk of electricity shortages"

Energy UK, which represents the energy industry, said Ofgem was right to highlight the challenges it faces in the coming years.

"We must secure over £150bn of investment in the UK to replace aging power stations and infrastructure, keep the lights on and meet our carbon targets," said its chief executive Angela Knight.

"All while making sure that energy bills are affordable for the millions of homes and businesses that rely on the power supplied by our members."

Price worries

The trade union Prospect, whose members include 21,000 professionals working in nuclear decommissioning and energy supply, called for government action to avert power shortages.

"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," said Prospect general secretary designate Mike Clancy.

Audrey Gallacher, director of energy at Consumer Focus expressed concern about the dangers of rising prices.

"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," he said.

"Consumers need protection from price spikes as well as power cuts."

 

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  • rate this
    +3

    Comment number 61.

    Bring in UKip, stop immigration and the use of our resources will go down, this is the biggest problem in this country, we need to close the doors now and get rid of the people who should not be here using up our resources......

  • rate this
    +1

    Comment number 60.

    We need solar power for the masses. More money should be put into making solar MUCH more efficient and affordable.

  • rate this
    +1

    Comment number 59.

    Successive governments have failed to invest properly in our energy. In fact our energy companies were sold off. Is it any surprise now that cracks are starting to appear. Years ago it was suggested we build more gas holding station, which hold reserve gas. Did we? No. Instead we thought it would be better to pump the gas from reserves held in France!

  • rate this
    +1

    Comment number 58.

    Time we woke up and smelt the coffee, abandoned wind generation, and stopped all solar FIT payments. 20+ years ago saw the privatisation of electricity and gas, the energy sector ever since has been dominated by offshore investors who only think short term, and who are encouraged by a succession of governments that think the free market will decide. The future is dark VERY DARK

  • rate this
    +1

    Comment number 57.

    Germany is in the process of building a new generation of coal-fired power stations to replace their nuclear. UK is sat on a sea of coal, we shld be doing the same, then no reliance on Russian gas etc.

  • rate this
    +88

    Comment number 56.

    Nuclear really needs to be pushed.

    Germany cancelled it's Nuclear power plans after Fukoshima...but more people died from German bean sprouts that year than radiation.

    Utterly ridiculous stigma attached to Nuclear power.

  • rate this
    +2

    Comment number 55.

    We seem to be obsessed with the idea that Wind Turbines offer a viable solution, they never can be.

    We will achieve more by simply turning the lights off there is so much waste out there we could easily reduce by 10%.

    Just look at any satelte photo covering the motorways & big cities just turn 25% of them off, some things are so easy!!

  • rate this
    +1

    Comment number 54.

    It is blindingly obvious that we need more generating capacity. In my view that can only come in the form of Nuclear Power stations and as another comment put " get on with it" 10's of Thousands of ugly lanscape blots of wind turbines will be needed to replace the loss of one 2000 mega watt power station. Gas power is short term and will leave us at the mercy to overseas supliers.

  • rate this
    +3

    Comment number 53.

    One thing the government needs to do is invest more money into the development of Nuclear fusion. If this can be harnessed then we can have large amounts of energy with little nuclear waste and it would solve the Helium shortage at the same time.

  • rate this
    +1

    Comment number 52.

    Surely OFGEM is supposed to ensure power companies provide the service to the British people and which they make huge profits from. Yet another example where Government and Regulators fail to protect use the end users. Why are these people still in their jobs???

  • rate this
    +22

    Comment number 51.

    So this would be the regulator that has had next to nothing to say about price-hike after price-hike for year on year, but now goes fishing for tax-payer money to prop-up the private sector infrastructure investment using the fear of brown-outs for persuasion. I'd say that you couldn't make this up, but some-one clearly has.

  • rate this
    +1

    Comment number 50.

    What do we expect when consecutive governments have been dilly-dallying around, erecting the odd inefficient wind farm as a symbol of being "green"?

    Interim arrangements - such as carbon capture technology - have not been implemented, nuclear has been disregarded, and renewable sources are proving to be highly inefficient and unreliable.

    Yet again, poor government policy is going to cost the UK.

  • rate this
    0

    Comment number 49.

    I would like to see where most of this energy is going - is it industry, or consumption in the home?
    For years homes have been getting more efficeint in terms of insulation, so if it's the home, what's going up?
    Could we ban the sale of energetically inefficient products? Or heavily tax industrial processes that use too much energy?

  • rate this
    +53

    Comment number 48.

    So after a national industry was sold off for pennies and profit was drained out, these energy companies didn't think to keep some of that profit to one side for when new power stations needed building?
    No, obviously not. Greed again. So now the poor and needy have to suffer. Why people keep falling for these privatisation scams is beyond me.

  • rate this
    0

    Comment number 47.

    The increase in population will bring this about regardless of 'policies'. This posion chalice of politics needs to be grasped by someone with more spine than those currently in The House.

  • rate this
    +3

    Comment number 46.

    If thepowers at be had more maracas and had signed the replacement to the ageing Nuclear power plants instead of bowing to the navel gazing Green brigade we would not be in this mess..

  • rate this
    +147

    Comment number 45.

    For most of my adult life I've had to listen to the whining of irresponsible NIMBYs and mischief-makers who first didn't want nuclear, then didn't want coal, then didn't want gas and finally didn't want wind turbines in their back yard. I'm looking forward to seeing what they want when they try to switch their lights on and nothing happens...

  • rate this
    +3

    Comment number 44.

    "and EU environmental legislation"

    And the most stupid, naive "green energy " targets that Blair and Brown signed up to that have become a lobbyists charter and a cash cow for energy companies that want to cover the whole country with heavily subsidised windfarms whilst deliberately not investing in sustainable and predictable energy generation (no wind, no energy, no backup).

    Greed once again.

  • rate this
    +2

    Comment number 43.

    So what are our increased energy bills going towards? Higher energy capacity, investing in alternative fuels or the pockets of investors and CEOs?

  • rate this
    +1

    Comment number 42.

    There you then - government of all colours ( bit especially the yellows) have prevaricated on this for two decades. Did they think it would go away or were they just leaving it to the next poor sop.

    Bit like the annual spending deficit - keep ignoring it and your kids will pick up the consequences

    Nuclear or renewables just get on with it

 

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