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
    +5

    Comment number 497.

    Industry and retailers alike do what they can to peg their energy costs anyway.

    It's the local and county councils who should be told to switch off every other street light between dusk and midnight, and switch them all off after that. There is a shocking waste of energy when 95% of the council taxpaying population are fast asleep, and artificial light is disrupting wildlife behaviour.

  • rate this
    +2

    Comment number 496.

    I went into a shop the other day and asked for "four candles" - guess what I got!

    A surly, apathetic "can't be bothered", "you'll have to wait until I've finished my conversation with my colleague about what I did last night", gum-chewing, eye-contact-avoiding customer experience!

    Oh, and "two candles" - because she'd misheard what I'd said during the course of her multi-tasking operation

  • rate this
    +12

    Comment number 495.

    relying on energy from companies that are owned by foreign govts is a major weakness in the national security of the entire island of the britain. energy is a global commodity so britain needs to find a ready supply, cheap, and fast, or its lights out for good. welcome to the true face of capitalism where half your salary will soon disappear in utility bills.

  • rate this
    +1

    Comment number 494.

    He told BBC Two's Newsnight programme: "I can assure you the lights are not going to go out." I wonder if this will be Michael Fallon's Michael Fish moment, the one where when someone had asked if there was a hurricane coming he said 'no there's not going to be a hurricane' & a few hours later the country was in tatters because there was a hurricane!

  • Comment number 493.

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

  • rate this
    0

    Comment number 492.

    478 ...or they would pass this cost to consumers in prices paid for food etc. Either way the domestic consumer would be screwed

  • rate this
    -1

    Comment number 491.

    Another excuse to fleece the Uk consumer.

    I doubt British Gas will limit their energy price hikes to a 'margin of two percent'!

    All the energy providers and the green lobbyists (who have considerable energy investments) must be laughing all the way to the Bank!

    Much worse than the Irish bankers actions and comments!

  • rate this
    0

    Comment number 490.

    Lets stop faffing about and invest in hydrogen. It will almost certainly eventually become the fuel of choice. Once it's a little easier and cheaper to separate.
    In the meantime, lets just turn off a few more lights. Particularly those left on in office blocks. An if we all were just a little more careful with our energy use, it would help.

  • rate this
    +1

    Comment number 489.

    Can remember doing homework by candle light during the 3 day week. Could be a problem if the lights go out again as most homework is now done on laptops.

  • rate this
    0

    Comment number 488.

    "anotherfakename
    Its all really simple. Instead of doing what the EU wants"

    It may amaze you to know that the UK was one of the main proponents in determining and agreeing EU policy in the first place. The EU doesn't hand out tablets of stone and demand compliance (despite what the Mail says). UK governments (Tory and Lab) have demanded the EU set common standards and targets for all EU states.

  • rate this
    +2

    Comment number 487.

    Only EDF of the big six energy companies cartel went for the atomic power option and have tried to get the UK taxpayer over a barrel by dragging out the process and demanding unrealistic returns. They know the power will run out faster and sooner than most realise but the Government is now courting the Chinese and maybe that will stop the lights going out. Else they will for sure.

  • rate this
    +2

    Comment number 486.

    471.Perton66
    461.CodeDebugger

    If energy price for industry went up, then ALL industry prices would go up so competition between them would be unaltered (unless international). These increased costs would be passed on in product price so the consumer would still pay but directly instead of indirectly.
    We all use the services provided by others - that is what society is.

  • rate this
    +2

    Comment number 485.

    The National Grid has the same vested interests in scare mongering over energy as National Rail do about the "necessity" of HS2.

    The whole concept of privatised infrastructure companies (energy, water, rail etc) overseen by "National" unaccountable bodies and monitored by self appointed quangos (who appear to cover up their findings anyway) is totally flawed and a proven failure.

    so what's new

  • rate this
    +1

    Comment number 484.

    460. chrislabiff
    So you are saying they were deliberately destroyed so that they could be privatised? Ok, so in other words we cannot trust any politicians of any party to run our power grid.
    You mentioned Rail? do you think that a govt owned rail network with todays demands would run more cost effectively than it is now, seriously?
    It might be cheaper but cheap is useless if it does not work!

  • rate this
    0

    Comment number 483.

    Is simple, the lefty greens out there dont want on shore wind power as the windy places are nice to look at, they dont want off shore power as becase some seagull may get inconveniounce. they dont want nuclar becase is nuclar, they dont want coal becase of carbon, they dont want shale gas etc.
    but it seems they shout and whine if the light go out. so its candles (oh wait carbon) and hair shirts.

  • rate this
    0

    Comment number 482.

    468
    Solar is a good idea but in Peterborough the council had panels put on a building and has total failed to get them to work. The makers and the installers say they are OK, but they have never provided electricity. Solar parks are a good idea, but if you put them on land used for growing crops, you can't grow food on it so you are in a quandary.

  • rate this
    +1

    Comment number 481.

    @461. CodeDebugger
    Yes, the companies would speed up their current process of moving to where energy is cheap - India and China. The government would have you believe that it is labour that is cheap in those countries, it is NOT that at all, its cost of capital, energy, land and buildings that are cheap there and beyond belief here

  • rate this
    +5

    Comment number 480.

    #417 Speedthrills
    "As everyone knows there are two tides / 24 hours. That would mean two peaks of generation / 24 hours"

    Depends where you live. New Zealand gets two really nice tides. The south coast of England gets tides going up the channel, tides coming down it. Southampton gets all kinds of weird effects from the Isle of Wight. Put simply - tides aren't simple. They beat wind though...

  • rate this
    0

    Comment number 479.

    A problem highlighted by the energy trade.

    http://www.bbc.co.uk/news/business-21038310
    Yet one year ago http://www.bbc.co.uk/news/business-18823668 so Aussie business is cuckoo.
    http://www.bbc.co.uk/news/business-18823668

    China's export to the EU fell off a cliff. The economy then financialised, a refocus in business survival on credit

    This is a new problem. Post 2008 that is not understio

  • rate this
    -1

    Comment number 478.

    @461 A far better way of doing it, is to make energy companies charge them (businesses) the same rates as households pay, that way they would be forced to cut consumption

    No - they would be forced to relocate to another country

 

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