The House of Lords has warned the UK government of looming electricity power cuts in winter 2015-16 as a ‘very slow-moving car crash’ – a warning which will be seized upon by the Scottish Government as proving its own recent ‘electricity-crunch’ warnings.
In their Economic Affairs report, the Lords said: “There is a growing risk of power cuts in the UK as the margin of electricity generating capacity over peak demand shrinks. It reflects a lack of clarity and consistency in energy policy over many years.
“The economics of power generation are heavily dependent on high load-factors.
“The shift to renewable sources is not only expensive for consumers but also imposes a burden on other generators.
“Wind and solar power are by their nature intermittent. Constant supply of current requires back up generating capacity from conventional sources. Its limited usage can make it an unattractive investment. Gas fired capacity is used for only part of the time, undermining the economics and discouraging investment.
“Uncertainty over the economics of new conventional generating capacity and more generally about future public energy policy is discouraging investment at a time when older stations are reaching the end of their working lives or, in the case of coal-fired stations, being decommissioned under environmental regulations.
Viscount (Matt) Ridley, a science journalist, said; “Our policy is that, when somebody wants to make electricity, they will take the wind power first and the gas second. They will only take the gas if the wind is not blowing. As a result, they are not going to build the gas plant because they cannot run it all the time.”
“The Government estimates the electricity sector’s investment needs at £110 billion over the next decade. The slow pace at which that investment is proceeding is arousing serious concerns about the ability of generators to maintain sufficient supply to meet demand – particularly during periods of high use.”
According to OFGEM’s most recent Electricity Capacity Assessment report, the probability of a large shortfall requiring the controlled disconnection of customers, involving industrial and commercial sites before households, will increase from around 1 in 47 years in the last winter to 1 in 12 in 2015/16.
This will increase to 1 in 4 if anticipated demand reductions resulting from increased efficiency do not materialise. There is a concern that inadequate capacity could lead to cuts in supply to business and industry which would have serious economic consequences.
In his evidence to the Lords, Professor Helm described the situation as a “very slow-motion car crash” and warned that “by 2015 or 2016, the capacity margin in this country will be very close to zero.
“What is going to fill the gap in 2017, 2018, 2019 and 2020? We will be lucky if Hinkley is on the system by 2022 or 2023. More nuclear power stations are coming off between now and then. Most of the coal, through emissions control, thankfully, is being closed, but there are not enough wind farms and solar panels to fill that gap in a credible way.”