Enappsys, a business that monitors the UK energy market, has warned that high demand and tight supply could lead to power shortages next winter, potentially driving up prices for consumers.
Enappsys based their analysis on last years’ winter demand figures, and combining them with availability figures adjusted for the opening and closure of various power plants over the past year.
Last winter, National Grid were forced to turn to then-new last resort measures in order to keep lights on across the country as high demand clashed with supply that was tightened following plant closures and breakdowns.
Since then, 11 coal and gas power stations have fully or partly closed, including Longannet which, while operational, was the third largest coal fired power station in Europe. Only two new gas plants have become operational in the same period.
The UK is currently in the process of phasing out all coal power, and intends to have the process completed by 2025. In order to counteract the lost capacity, efforts are currently being put into expanding our offshore wind generators, and into nuclear power. However, while the combined on and offshore wind generators in the UK can technically generate up to 13GW of power, this is rarely reached, and as such it is not a wholly reliable source of energy.
Further, a large part of our nuclear potential relies on the controversial Hinkley Point C nuclear plant, the future of which is very much in question.
As such, Enappsys have claimed, the grid is likely to struggle even more this year than last, with spare supply dropping and last resort measures being used once more.
According to Enappsys’ analysis, if demand this year matches last year’s, then for around 85 hours during the winter, spare capacity will sit at just 2GW. While this will not necessarily mean lights out, indeed it is unlikely to cause blackouts, the emergency measures that National Grid may have to resort to will push prices up temporarily.
The ‘last resort’ measures involve National Grid firing up various small generators, each with a minimum capacity of 3MW, to provide temporary power. These temporary Short Term Operating Reserves do not come cheap. Indeed when they were turned to last year, National Grid paid out £2,500 per MwH for just one of them.
A director at the company, Phil Hewitt, said: “If the winter is harsh things will get very expensive.”
He argued that prices going up could be good in the long run, as it is likely to spur the creation of more power stations, preventing the same thing happening in the future, but warned that smaller suppliers are likely to be the biggest victims overall.
“He said: “High prices are not necessarily a bad thing – they encourage people to build power stations… However, some small suppliers may not survive the winter.”
The Department for Energy and Climate Change assured that the lights will be kept on throughout the winter, citing National Grids available emergency measures, but did not comment on any added costs that may be incurred.
A spokesperson said: “Keeping the lights on is non-negotiable. National Grid has a range of tools in place to manage the electricity system and we will continue to work with them and Ofgem to take whatever steps are necessary to protect our energy supply.”
And National Grid offered their own assurances, saying that while margins over winter are likely to be fairly tight, they should still remain at a manageable level.
They said: “Margins for this winter look tight but manageable and we believe we have the tools in place to manage the system. Historically the market has always responded to periods of lower margins and we expect this winter to be no different.”
