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
    -1

    Comment number 921.

    904.SnoddersB .
    I don't expect you to explain in 400 characters how leaving the EU will solve the wretched situation brought about here by right wing economics But can you show why it's not just another anti-EU rant from a party that has no real policy other than to get us out of the only economic grouping that makes any sense for us? We need more than 'Rule Britannia' to solve the energy crisis

  • rate this
    +1

    Comment number 920.

    @917.Steve
    OK, so I posited a couple of facts and points for debate to counter your biased argument against nuclear power and you insulted me in return. How pathetic.

    Hey, go back and read your insults toward me - A-Hole.

  • rate this
    +2

    Comment number 919.

    -

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

    Yeah, de-centralise it! Support small scale, local generation so the profits won't go to only a few.

    -

  • rate this
    +5

    Comment number 918.

    The answer is to peg demand by not allowing 500,000 immigrants to come to the UK every year.

  • rate this
    +1

    Comment number 917.

    @899.JPublic - OK, so I posited a couple of facts and points for debate to counter your biased argument against nuclear power and you insulted me in return. How pathetic.

  • rate this
    +3

    Comment number 916.

    "Scotland is estimated at being able to produce 12 gigawatts of energy from marine renewable and offshore wind sources by 2020"

    It's a bit like saying Nevada would be the richest US state when it builds 10,000 square miles of solar panels. The cost of building the capacity and restructuring the grid to carry it is massive; ask the Germans. Potential is not the same as practically realisable.

  • rate this
    +2

    Comment number 915.

    " Nimby " will become "Pimby " ----- " Please in my backyard."
    We need Nuclear, Tidal, and Wind.

  • rate this
    +4

    Comment number 914.

    Once again, enforced scarcity due to lack of investment by the privatised industries of greed & ever increasing profits leads to shortfalls in "the product".

    Privatisation is designed to squeeze an industry of profit until its dry.

    Once that industry is of no use, it simply moves on to the next big thing.

    NATIONALISE ALL RESOURCES VITAL TO SUSTAINING THE COUNTRY RIGHT NOW!

    Before its too late.

  • rate this
    +1

    Comment number 913.

    Lets get into place a powerful regulatory body unlike the cowards of this one, that will protect consumer interests.

    Far from raising prices we should ENFORCE CUTS.

    The free market idelogue director has held a gun to our heads long enough.

    Its time we wakened up to the lies, deciept and rip off culture that the unregulated market imposes on us.

    This must stop.

  • rate this
    +3

    Comment number 912.

    So the power companies as promised have re-invested some of their profits? We might as well have a nationalised power infrastructure - not a political football just sensible.

  • rate this
    0

    Comment number 911.

    903.slightlyallthetime

    As there have been warnings from various people/groups in the know about this for more than ten years you can assume this is a real and serious issue. The figures speak for themselves and the current consumption graph alone is scary. You can't write this one off as a 'nasty shareholders to blame so I don't need to do anything' scenario. However much you might want to.

  • rate this
    +2

    Comment number 910.

    899.JPublic
    **
    Chernobyl was down to the Soviets over riding the safety procedures of their own reactor

  • rate this
    +1

    Comment number 909.

    @ 904.SnoddersB

    "Vote UKIP."

    I really don't see how voting for a bunch of insular xenophobes is going to help the energy situation.

  • rate this
    +2

    Comment number 908.

    @893 - you want people to read something put out by UKIP? Why? It's not as though they are a serious political party, after all...

  • rate this
    +4

    Comment number 907.

    There's enough energy, we just need to stop wasting so much of it.

  • rate this
    +3

    Comment number 906.

    @896. Neil - As Benjamin Disraeli noted, whereas politicians care only about the next election, statesmen think of the next generation.

    We have few, if any, statesmen in this country.

  • rate this
    0

    Comment number 905.

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

    Only a country as daft about theoretical economic markets, and as ignorant of engineering, construction, and people's energy needs could come up with a remark like that. We need Government working with the energy companies to create new capacity, not with regulators to 'reform the market'

  • rate this
    0

    Comment number 904.

    Thanks to the EU and their dictatorial attitude we are now in the situation where we will have to close perfectly good power stations with no new ones to take their place. The whole problem is cfreated politically by Brussels and is intended to hurt the UK.

    Time for our referendum I think. Vote UKIP.

  • rate this
    0

    Comment number 903.

    As with all these stories it's difficult to know what to believe,could this just be an excuse to put electricity prices up in the guise of building new power stations,meanwhile the shareholders continue to do quite well when it should be them foregoing dividends to finance "their" company.
    In 3 years time will someone come out of the woodwork and say all this data was wrong,you can't trust anyone.

  • rate this
    -3

    Comment number 902.

    We do not want Nuclear Power. Nuclear Power is very dangerous. The Government keeps very quiet about the dangers of Nuclear Power.

 

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