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

    Comment number 761.

    The few who earn over 100k a year will be fine, they will pay the extra an have large warm well light houses. The average prols earning from 5k to 25k, will suffer greatly those over 25k will have to down size their life styles.The world we are heading for will see the gap between the have's and have nots widen, the consequence will be civil unrest, Unless government gets a handle on this soon!

  • rate this

    Comment number 760.

    Greg Dance you have confused causation with correlation. yes the Arctic Sea Ice is Melting but the Antartic is not and is growing. Please can you point us to evidence that this is due to climate change or more specifically man made C02 and whether this is Natural climate change or Man made

  • rate this

    Comment number 759.

    Why the hell are we not building some nuclear power plants??

    Safe, clean and they work.

  • rate this

    Comment number 758.

    "Sidney Monroe
    Green taxes = reduced emissions = reduced global temperatures (?)"

    You still don't get any of this science stuff do you? Even if we stopped all CO2 emissions now temperatures would still rise and then plateau.

    "If sea levels are rising why are the low lying countries unaffected?"

  • rate this

    Comment number 757.

    Trout Mask Replica

    'You also claim "mass population displacement" hasn't come as predicted but then say 5 million have flooded into the UK in recent years.'

    You are even misquoting me now! I've never said anything about UK flooding. Weather and climate are made of the same thing - the only difference is time.And I am afraid a meteorologist still knows more about climate than you do.

  • rate this

    Comment number 756.

    735. Walt78
    But we'll still have The City as the financial capital of the world though?
    The fact is successive governments have bet the house on the financial sector and lost, as Theo Paphitis would put it, the family inheritance. At the cost of everything, absolutely everything else. Now we're broke but in denial. Save The City and all will be fine again...

  • rate this

    Comment number 755.

    So the energy watchdog has only just realised the consequences of the current government's slavish adherance to EU CO2 proposals. The government has to reduce CO2 output by 20% by 2020. The only way to achieve this is by closing coal-fired powerstations and spend billions on part-time windmills - and so it continues to close power stations regardless of the fact we will be facing power shortages!

  • rate this

    Comment number 754.

    @739. OLDCOMP "We should look after the UKs interests first and scrap the carbon taxes.. Green energy is a myth"

    Please tell me I don't live on the same planet as you.

  • rate this

    Comment number 753.

    @745 - if the renewable industry had had anywhere near the subsidy that you in the nuclear industry had had since it's inception though? It'd be considerably further on than it is.

    Besides, the nuclear industry has sat on its laurels and watched its assets crumble for the last 20 years, hasn't it? No investment in new technology. Just waiting for the chance to hold out the begging bowl again...

  • rate this

    Comment number 752.

    UK has heaps of energy, we are doing everything we can as idiot members of EU to create problems. The global warming issues are still unconvincing, and if we don't burn coal, the rest of the world will! Does India and China give a toss? Nope, but we sign up to any targets and then screw the consumer to pay. Our politicians fail us whilst handing our cash out as aid! Put Britains first!

  • rate this

    Comment number 751.

    I don't like to say I told you so but I've been warning people about this for the past few years, until recently I worked in a coal station that is closing March next year due to opt out of the LPD and it's well known this issue has been a perfect storm that's been building up for some time, the main problem is Governent they have sat on their hands for far to long & now it's to late to avoid it..

  • rate this

    Comment number 750.

    @683 - '1. Build nuclear power stations.
    2. see 1.'

    A gross oversimplification. Are you a politician, perchance?

    (I don't have a problem with nuclear. The technology is fine, and quite safe, natural disasters notwithstanding. Don't pretend that obtaining the fuel and dealing with the wastes aren't both expensive and environmentally damaging though. Big achilles heel of the technology.)

  • rate this

    Comment number 749.

    The cause of this is people thinking nuclear is dangerous (perpetuating nonsense read in newspapers by non experts), whilst thinking wind, solar and kitten driven turbines are the answer (see previous). People who think full kettles are the problem have no idea of the SCALE of the situation. Turning a kettle off ignores the fact that we have less power plants and cant build them due to lobbying.

  • rate this

    Comment number 748.

    Agree that this is not something we should blame on utility companies. Ofgem was set up to regulate the utility companies and has failed to prevent this from occurring - Ofgem can also be blamed for allowing utility companies to have crooked sales practices, tariffs designed to confuse, penalising the poorest and lowest users with highest prices. Collective energy switching is way 4 consumers

  • rate this

    Comment number 747.

    "Sidney Monroe
    There is no evidence they have risen at all - despite evacuation plans for the Madives and Tuvalu"

    You've never provided a citation for any peer reviewed prediction in the same way you still don't get teh difference between weather and climate. You also claim "mass population displacement" hasn't come as predicted but then say 5 million have flooded into the UK in recent years.

  • rate this

    Comment number 746.

    Electrical energy is the bedrock of our society..without it everything fall apart.

    Governments for 30 years have ducked the issue..

    We need Nuclear power, cleaner coal fired stations, more small CHP units, biofuels and wind, wave and solar;if there's one thing that could drive us out of recession it's £20bn of investment guarantees for this sector and tax concessions on development work.

  • rate this

    Comment number 745.

    We in the nuclear industry have been saying this for the last 20 years. Wind power is useless and we are closing coal stations because of the CO2 (when they could be kept running until we have an alternative). we needed to start nuclear new build 10 years ago to ensure keeping the lights on.

  • rate this

    Comment number 744.

    I worked in the CEGB/National Power Thermal/National Power Nuclear/Npower for 35 years working to provide a future for our Nationalised Industry, providing power at the lowest practical cost to the British Public.... Maggie Privatised the whole thing and sunk it... Now we have no Pwer Industry - no skills, nothing is left of the World Leader in Electricity Supply....

  • rate this

    Comment number 743.

    Trout Mask Replica
    Please enlighten us as to which scientists have ever said paying more taxes will enable us to "change the weather".

    Oh come on Mr Trout - you don't have to be so obtuse and humourless all the time. Green taxes = reduced emissions = reduced global temperatures (?) If sea levels are rising why are the low lying countries unaffected? Does it just need to rise a lot more then?

  • rate this

    Comment number 742.

    This shows the failure of politicians of all shades over many years who continually fail to grasp the nettle when it comes to hard decisions. They all knew the nuclear power stations were aging and have done nothing to effectively replace that capacity instead investing in wind farms need heavy subsidies to survive. We are an island and the tide comes in and out twice a day what about wave power?


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