The Daily Telegraph, 5 October 2012
Britain faces an increasing risk of power blackouts and higher electricity bills in the next four years, power regulator Ofgem has warned in a report.
An “unprecedented combination” of the eurozone crisis, tough EU environmental laws and the closure of ageing coal and oil-fired power stations, has increased “the risk to consumers’ energy supplies”, Ofgem said in its annual Electricity Capacity Assessment on Friday.
The regulator, which first highlighted the problems in its Project Discovery report in 2009, said: “Today’s report shows that these problems have not gone away.”
It said spare generation capacity – the margin the power system has to respond to increases in demand – could fall to 4pc by 2015/2016 from 14pc today and tightening electricity supplies “could lead to higher bills”.
“Coal fired-generation is likely to close earlier than expected under EU environmental legislation and the risk of a shortfall in electricity is highest in 2015/16,” the regulator said.
The threat of electricity shortages reinforced the need for energy reforms to encourage investment, according to the report.
Alistair Buchanan, the Ofgem chief executive, said: “The unprecedented challenges facing Britain’s energy industry, identified in Ofgem’s Project Discovery, to attract the investment to deliver secure, sustainable and affordable energy supplies for consumers, still remain.”
Edward Davey, Secretary of State for Energy and Climate Change welcomed the report and said the Government would respond formally before the end of the year.
“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,” he said.