Energy minister 'fully behind' National Grid

 

Michael Fallon: "I can assure you, the lights are not going to go out"

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The government says energy minister Michael Fallon is "fully behind" a National Grid consultation that could see big businesses paid to cut their energy usage in times of shortage.

Last night Mr Fallon appeared to dismiss the proposal in an interview on the BBC's Newsnight programme.

It followed a warning from energy regulator Ofgem that the risk of power cuts has increased in the UK.

Despite that the government has emphasised "the lights won't go out".

Electricity network owner National Grid has suggested large consumers, such as big shops and factories, could be asked to lower use between 16:00 and 20:00 on weekdays in the winter.

Ofgem also suggested keeping some mothballed power plants in reserve in case of emergencies.

"This does not mean that disruption is imminent or likely, but Ofgem, [the Department of Energy and Climate Change] and ourselves believe it appropriate to consider what measures could be taken in case margins deteriorate further," National Grid said.

In a statement, DECC said Mr Fallon "is fully behind Ofgem and National Grid's consultations which are about whether they should take the prudent step of extending their existing services in the context of possible tightening in the supply margin in the middle of the decade".

Analysis

Can it be right to ask businesses to close to keep the lights on for the rest of us? That's what is being proposed by National Grid.

There is no compulsion. No rationing. Instead medium and large firms will be paid to reduce their electricity demand.

The National Grid says this would be a last resort to be used on winter evenings when temperatures plunge and demand soars.

It is also proposing to pay some electricity generators to keep mothballed plants ready to provide power. The Grid accepts that these new provisions sit outside its "usual system operator role" and are likely to modestly increase household bills.

But some industrial users may reflect that if the only way to keep the lights on is to shut down factories and businesses then government energy policy can't be working.

'Lights stay on'

"One option, if the need arose, would be for companies to voluntarily enter into agreements to fire up currently mothballed power stations or for large users to reduce their demand, in return for which they would receive payment," it said.

"This is an extension of what already happens in the power market. There is no compulsion and it is not rationing.

"We are confident that, with Ofgem and Grid having all the tools at their disposal, the lights will stay on."

In an interview on Newsnight, Mr Fallon appeared to dismiss the idea of paying big users to cut back.

When asked if there was any truth to reports that big factories and businesses would be asked to cut their energy use in 2015, Mr Fallon replied: "No".

"The latest [Ofgem] assessment has shown that the position is slightly worse than the previous assessment last year.

"The regulator Ofgem has got to make sure, with all the tools at its disposal - bringing some mothball plant back in action and back on line - that the lights stay on and they will."

In an assessment released on Thursday, Ofgem said spare electricity production capacity in the UK could fall to 2% by 2015, increasing the risk of blackouts.

The watchdog said more investment in power generation was needed to protect consumers.

It said: "Ofgem's analysis indicates a faster than anticipated tightening of electricity margins toward the middle of this decade."

The global financial crisis, tough emissions targets, the UK's increasing dependency on gas imports and the closure of ageing power stations were all contributing to the heightened risk of shortages, Ofgem said.

 

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  • rate this
    0

    Comment number 17.

    Where did this come from?

  • rate this
    +7

    Comment number 16.

    This is the ideal time to be seriously discussing the percentages of energy that micro power could offer.

    Home solar panels and community windmills would be easier and faster to build and maintain than some huge (probably nuclear) mega-plant.

    It would be paid for by individuals not Govt budget, if offered the same sort of subsidies that construction and energy plant companies get to build.

  • rate this
    +22

    Comment number 15.

    I don't think the gov quite realises the possibilities for unrest should we be left with power cuts due to the incompetence of our MP's and greed of our corporates supplying power.
    As an electorate we have been waving the flag on these issue's and highlighting the vested interest which have stopped us from tackling our power as a state rather than abdicating it to the market.

  • rate this
    +2

    Comment number 14.

    what a good idea the government now have so much money they dont know what to do with it but it is a good idea to give the millionaires company owners more money to switch of their lights to save the world when it would be cheaper just to ask big shops to turn of half the lights they leave on all night for no reason at all who goes window shopping at 2 a m anyway unemployed tramps who cant afford

  • rate this
    +71

    Comment number 13.

    This looks like propaganda and scaremongering from the Energy Industry to me.

    They are already making noises about how bills are going to have to rise to pay for green energy and investment in new power stations.

    So either way either the bill payer (i.e. us) or the tax payer (i.e us) as opposed to the energy companies (i.e. shareholders) will be coughing up (again).

  • rate this
    -4

    Comment number 12.

    im not so sure the general public realise how much power daily they are using....a 42 inch lcd will use the equivilent of leaving 3 or 4 rooms lit up with say 60 to 100w lamps while just 1 set is on. its a miracle there arn't power cuts now quite honestly.

  • rate this
    +24

    Comment number 11.

    Surely some of the key roles of government are:
    - Ensure the provision of a stable supply of electricity/gas
    - Ensure the provision of a stable supply of water
    - Ensure the provision of a reliable, affordable public transport system

    What have our politicians done? Sold the family silver to the highest bidder (or biggest party donor...) and idly watched short-term profiteering kill our services.

  • rate this
    +5

    Comment number 10.

    Why should they be paid for doing their bit? Frankly the minister should be ordering companies to do everything they can to reduce consumption like using low energy bulbs and switching off equipment like computers overnight. If they don't make changes, then fine them. Make them pay, don't pay them!

  • rate this
    +119

    Comment number 9.

    Seems about right for a third rate rate banana republic, a corrupt establishment, power cuts, decaying infrastructure, extortionate utility companies, a corrupt financial system, welcome to the UK in the 21st century.

  • rate this
    +106

    Comment number 8.

    Delay in building new power stations is because energy companies & financiers are putting the squeeze on to maximise their price/profits .

    If UK invested the SAME money in UK nationalised power stations it would cost MUCH less as you cut out the profiteering.

    It is CRAZY to invest so many £bns & NOT even own it & then consumers be FORCED to pay more for something you already paid for

  • rate this
    +119

    Comment number 7.

    Another example of why privatisation of the utility companies is wrong.

  • rate this
    +23

    Comment number 6.

    "...large consumers could be asked to lower use between 16:00 and 20:00 on weekdays in the winter" . This is nothing new. At my former steelworks we did this for many years in the early 2000s, called "Load Management". It does however become untenable when product demand or price picks up - not at the moment I suspect - so can only be a short to mid-term option whilst power capacity is grown.

  • rate this
    -1

    Comment number 5.

    I don't understand it. Didn't windmills solve the energy crisis?

  • rate this
    +42

    Comment number 4.

    I suppose that when the lights do go out he will simply say he was misquoted or misunderstood! As #1 John M said welcome to the third world.

    All those North Sea Oil and Gas wasted by decades of political incompetence!

  • rate this
    +26

    Comment number 3.

    It's not like the National Grid would know best or anything?

  • rate this
    +9

    Comment number 2.

    Energy blackouts are a real prospect in the next couple of years, a combination of successive governments focussing on shutting down nuclear power plants and only investing in extremely inefficient 'green' energy. It is now too late to have enough capacity in place for 2015/16 but investment now in new, clean nuclear technology will at least secure things for the following decade.

  • rate this
    +59

    Comment number 1.

    Welcome to the Third World, folks!

    (and we are STILL handing out £11Bn in overseas aid ?!?)

 

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