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
    +76

    Comment number 37.

    Michael Fallon's statement that THE LIGHTS WILL NOT GO OFF will come back to haunt him when the lights do go off.

    There has been no long term planning since the Central Electricity Generating Board was shut down on privatisation. Since then successive Labour and Tory Governments have done nothing to ensure that there is a long term plan to generate electricity.

    All parties have let us down.

  • rate this
    +32

    Comment number 36.

    We need to take our heads out of the sand with energy.

    Nuclear is the way forward.

  • Comment number 35.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 34.

    I suspect that Miachael Fallon's comment will come back to haunt him in the not-too-distant future!!

  • rate this
    +2

    Comment number 33.

    Street lighting is already been sparely used by some councils so a rolling out of more of this will help, if I remember correctly the 3 day week in the 70's resulted in power saved plus ironically an increase in production. !!!

  • rate this
    +6

    Comment number 32.

    Have you ever been into a large store and been hit by the wave of hot air as soon as you walk through the door. Stores should be compelled to limit the inside temperature to no more that 20°C or similar agreed reasonable temperature. That should save £millions.

  • rate this
    +6

    Comment number 31.

    Having carried out academic research into the energy industry, I can assure you that this is not scaremongering and has been known about for considerable time. Power stations are going offline and we are not building new generation capacity in addition to other factors like the supply of gas and unreliable renewable energy. Therefore margins are becoming tighter and the risk increasing.

  • rate this
    +4

    Comment number 30.

    The way this country is being run by the government it won't be long until we're back to candle power. Why don't these power companies, whom it has to be said, make vast amounts of extortionate profit to keep their greedy shareholders happy, while the consumder has to suffer, why don't they reinvest some of their retained profit?

  • rate this
    +67

    Comment number 29.

    I cant stand the fact that the energy companies are making huge profits and then holding out on building more power plants because they want even more profits! The greed of the energy companies is starting to reach banker level!!!! Maybe Brazil has the right idea?

  • rate this
    +2

    Comment number 28.

    I'll happily cut my power usage if the government is paying...double win, no bills and state handouts. I'll even stop using my car to get to work, just sit at home all day reading consuming no power at all if the pay is high enough.

    Where do i apply for a job in the ridioculous ideas office of the government?

  • rate this
    +6

    Comment number 27.

    If you want industry to cut it's energy use then force them to. Right now they have to 'trade carbon credits' (a commodity that doesn't actually exist?!) which allows the rich guys to buy the right to pollute!

    It's madness!

  • rate this
    +24

    Comment number 26.

    Lets face it, IF the power industry was still nationalised this CONdem Govnmt would stop spending on it because of austerity. We are being (b)led by ostriches

  • rate this
    +4

    Comment number 25.

    Other nations must laugh at our energy 'strategy'....mostly the ones in the EU.

  • rate this
    +4

    Comment number 24.

    When the lighte go out,Wait for the quote ITS LABOURS FAULT.

  • rate this
    +100

    Comment number 23.

    So much for privatisation.

    Re-Nationalise NOW!

  • rate this
    +20

    Comment number 22.

    Thank God for Fallon, he is assuring us the lights will stay on, his career shows he has absolutely no experience of anything useful, a career politician (guess he got it mixed up with electrician) he will say Yes to anything that will save the government and himself embarrassment. Of course he will blame the next incumbent for the lights going out - £11billion foreign aid - should we move there?

  • rate this
    +1

    Comment number 21.

    Hang on - aren't the Govt usually in favour of anything that benefits big businesses?

    I'm sure the general public would be happy to cut energy use between 4pm & 8pm on weekdays in the winter if they got paid by the energy companies. Anything to help lower extortionate bills.

  • rate this
    +3

    Comment number 20.

    Ostrich management again! (They will probably claim it is someone others fault anyway).

  • rate this
    +59

    Comment number 19.

    Office Blocks with their lights left on. All night. Thousands of them.
    Such a waste! Make them turn their lights off when they are not in use. Rocket Science apparently.

  • rate this
    +2

    Comment number 18.

    An obvious attempt by the energy suppliers to soften us up for price rises. In the same way as water suppliers manage to achieve water shortages in the rainiest country in Europe, so now hydro energy, coal gas and oil manages to be lacking in de-industrialized Britain. Yet somehow we are to blame for their short-term thinking. Don't understand this.

 

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