Blackout risk rises as UK energy crisis deepens
National Grid expected to confirm increased blackout risk, as experts warn crisis will worsen unless subsidies are paid to new gas power plants
Without the emergency measures, a blackout this winter could have been highly likely, Ofgem analysis suggests
Britain faces the highest risk of blackouts in almost a decade this winter, National Grid is expected to say next week, amid warnings that households will have to pay billions of pounds in subsidies to new gas power stations to prevent the crisis worsening.
National Grid is expected to confirm estimates that Britain’s capacity margin – the effective ‘safety buffer’ between peak electricity demand and available power supplies – will fall to about 1.2 per cent this winter, the lowest in a decade.
It has already prepared emergency measures to help keep the lights on, including paying factories to switch off between 4pm and 8pm on weekdays to reduce demand, and paying old power plants to stay open.
These measures have artificially bolstered the margin to about 5.1 per cent – still the lowest level since winter 2007-08, National Grid is expected to confirm.
Analysis by Ofgem, the energy regulator, suggests that without the emergency interventions, a blackout during a cold snap would be highly likely.
The risk of “controlled disconnections”, in which customers’ power supplies are cut off, could have been as high as a “one in one year” event – implying an incident would have been expected at some point during the winter.
Although National Grid and Ofgem insist their emergency plans mean the lights will stay on, the publication of the latest forecasts is expected to reignite debate about how to solve Britain’s looming power crunch.
The tightening of supplies has been caused by the old polluting coal plants being forced to close by environmental rules more quickly than new plants are being built.
More coal plants and old nuclear plants are expected to close in coming years, worsening the crisis. Expert warned a solution to keep the lights on was likely to be costly for consumers.
Old, polluting coal plants are being shut down
The Government’s own plans suggest that 20 new gas-fired power plants will be needed to help keep the lights on by 2025, according to analysis by Alan Whitehead MP, Labour’s shadow energy minister.
But building a new gas-fired power plant is “not a viable commercial proposition” at current low electricity prices, he said.
Although the Government has introduced a subsidy scheme called the “capacity market”, designed to encourage more to be built, this does not appear to have secured any new plants so far because subsidies are too low, Mr Whitehead said.
Subsidies are instead being paid to existing coal and nuclear plants through the scheme, the design of which Labour has criticised.
Subsidies would need to be paid “at much higher levels”, totalling billions of pounds, in order to secure new gas plants, Mr Whitehead said - "giving far more free money out to existing generators in the process".
Peter Atherton, analyst at Jefferies, agreed that about 20 new gas plants may be needed and estimated they would cost a total of £10 billion.
“At the moment we are not building new gas [plants] and unless we do there is a risk both to security of supply and the decarbonisation,” he said. “The big question for policymakers is do we think the capacity market will work? Or do we panic?”
Richard Howard, head of energy at influential think tank Policy Exchange, estimated that a new gas plant might require guarantees of up to £40 million in subsidies per year, for 15 years – roughly double the level currently on offer – in order to get built.
He said the lack of new gas plants was “not currently a problem” but said there was a risk “the cost of bringing on new capacity could increase” as more plants close in coming years.
A spokesman for National Grid said: "We’ve managed similar margins previously without any disruption to supplies but we’re not complacent. Even if the unexpected happens, we believe we have the right mix of tools and services to manage the network this winter."
A spokesman for the Department of Energy and Climate Change said: "Keeping the lights on is non-negotiable. National Grid has the right tools in place to manage the system this winter and we will ensure that they continue to do so in future."
A spokesman for Ofgem said: "National Grid has purchased additional services that it can use to help balance the system this winter giving it a 5.1 per cent margin which it considers manageable. We’re confident that National Grid has the levers to manage the electricity system even in the most testing conditions."
by Emily Gosden / via Telegraph