UK risks generation shortage due to fall in spare capacity

• 11 years ago (2012-10-07)
• Junior Isles

Europe 1061

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UK energy regulator Ofgem has forecast that the UK will run the risk of electricity generation shortages in the winter of 2015-16, as spare capacity falls from 14 per cent to just  4 per cent due to earlier-than-expected closures of coal-fired power plants under the EU’s large combustion plant directive (LCPD).

The LCPD caps the running hours of plants which opt out of emissions abatement measures at 20 000 hours or until the end of 2015.

In its analysis Ofgem argues for urgent electricity market reform to bring forward private-sector investment in the UK.

UK coal-fired generation has increased substantially over the past year, with generators looking to take advantage of low coal and carbon costs, with the result that many of the UK's coal-fired plants will close well before the end of 2015.

"Ofgem's Project Discovery report in 2009 identified the problems that Britain faced of an unprecedented combination of the global financial crisis, tough environmental targets and the closure of aging power stations would increase the risk to consumers' energy supplies and could lead to higher bills. Today's report shows that these problems have not gone away," Ofgem said.

The government’s upcoming Energy Bill will seek to address these issues, and Ofgem has said that "encouragingly" there was evidence that "suppliers have got the message."

"Security of electricity supply is of critical importance to the health of the economy and the smooth functioning of our daily lives. That is why the Government is reforming the electricity market to deliver secure, clean and affordable electricity,” said Energy Minister Ed Davey.

The Ofgem report was produced in collaboration with transmission system operator National Grid, and focused on capacity margin, which takes into account fundamental generation intermittency as well as fluctuations due to plant outages.