Ofgem warns of energy shortfall

5 October 2012
By Rachael Fergusson
Mobile version
Share |
Ofgem warns of energy shortfall

Ofgem warns of energy shortfall 

The UK is facing the rising risk of an energy shortfall within three years, energy regulator Ofgem warned today.

Ofgem said energy supplies were being hit by tough European Union environmental laws and the closure of ageing coal- and oil-fired power stations. It predicts the amount of spare capacity in the UK could plunge from current historic high levels of 14 per cent to 4 per cent in 2015/16, leaving the UK at risk of significant shortfalls.

The government welcomed today's report and said it hoped reforms as part of its forthcoming Energy Bill would ensure supply was secured.

Edward Davey, State for Energy and Climate Change Secretary, said: "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."

Ofgem's report, its first annual electricity capacity assessment, comes three years after findings of the regulator's Project Discovery study, which warned that energy supply shortfalls would lead to higher customer bills.

Ofgem said in 2009 that customer bills may need to rise by 14 per cent to 25 per cent to pay for investment to increase Britain's energy systems by developing more low-carbon power stations.

Alistair Buchanan, chief executive of Ofgem, 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."

Today's report reveals the UK could be left with a shortage equivalent to 1,000 households in 2015/16, or 9,000 households in extreme circumstances.

It estimates the chance of network operator National Grid having to cut power to customers would stand at one in 12 years in 2015/16.

But National Grid would cut power to businesses and industrial customers before households, which significantly reduces the risk of families being left in the dark, according to Ofgem.

It also has contingency plans in place to avoid interrupting supply to customers, by asking power stations to maximise generation and also by importing more power from Europe.

The Government is also looking at plans to pay gas-fired stations to ensure they are on stand-by to generate enough demand whenever required to boost the spare capacity.

Mike Clancy, general secretary designate at union Prospect, said: "This report highlights how imperative it is for the government to act now and introduce electricity market reform that ensures the programme of new nuclear build and other vital energy infrastructure projects, such as carbon capture and storage, are attractive enough to secure the long-term investment they require."

But Greenpeace policy director Doug Parr said the report "sends out a clear warning that we need to reduce demand" rather than build new power stations.

Audrey Gallacher, director of energy at Consumer Focus, called on the government to protect consumers from the threat of soaring bills, as well as energy shortages.

She said: "Consumers cannot write a blank cheque to cover the costs of new energy.

"To avoid this happening the government and regulator must ensure that the costs passed on to consumers are fully transparent and rigorously scrutinised."

Latest Issue

E&T cover image 1607

"As the dust settles after the referendum result, we consider what happens next. We also look forward to an international summer of sport."

E&T jobs

  • Design Delivery Leader, Palace of Westminster Restoration & Renewal (R&R) - Engineering Lead

    House of Commons
    • City of Westminster, London (Greater)
    • Circa £65,000 (There may be more for an exceptional candidate)

    You will lead on a number of engineering infrastructure and associated workstreams under direction from the Deputy Director

    • Recruiter: House of Commons

    Apply for this job

  • Senior Engineer, Network Equipment

    Energy Networks Association
    • Westminster
    • £49-58k per annum, dependent on experience

    Manage issues and working groups relating to all types of equipment and assets used on the UK Transmission and Distribution Networks.

    • Recruiter: Energy Networks Association

    Apply for this job

  • Programme Manager, Network Resilience

    Energy Networks Association
    • Westminster
    • Competitive salary, dependent on experience

    Co-ordinate the network resilience, emergency planning and the Single Electricity Number (SEN) work in the ENA Engineering team.

    • Recruiter: Energy Networks Association

    Apply for this job

  • Assistant Professor (Tenure Track) of Smart Building Solutions

    Premium job

    ETH Zurich
    • Zurich, Canton of Zürich (CH)

    The successful candidate is expected to develop a strong and visible research programme in the area of control and diagnostics of building systems

    • Recruiter: ETH Zurich

    Apply for this job

  • Process Controls Leader

    Premium job

    Phillips 66
    • Humber Refinery, South Killingholme, North Lincolnshire DN40 3DW
    • £60k - 75k plus extensive Compensation and benefits package, dependent upon experience

    Experienced Process Control Leader providing leadership and technical support for Oil Refinery. Extensive Compensation and benefits package.

    • Recruiter: Phillips 66

    Apply for this job

  • Regional Technical Support Manager

    Premium job

    Siemens
    • Warwick, Warwickshire

    You will be required to lead the regional Customer Services strategy and resources to maximise Customer satisfaction.

    • Recruiter: Siemens

    Apply for this job

  • Communications Engineer

    BAE Systems
    • England, Hampshire, Portsmouth
    • Negotiable

    Communications Engineer Would you like to play a key role supporting the UK's Maritime Communications Infrastructure? We currently have a vacancy for a Communications Engineer at our site in Portsmouth. As a Communications Engineer, you will be carrying o

    • Recruiter: BAE Systems

    Apply for this job

  • MetOp-SG Receiver Project Manager

    Science and Technology Facilities Council (STFC)
    • STFC Rutherford Appleton Laboratory, Harwell, Oxfordshire
    • £37,213 - £50,926 (depending on experience)

    Project Manager to oversee the development, production and test of spaceflight components and integrated receiver systems

    • Recruiter: Science and Technology Facilities Council (STFC)

    Apply for this job

  • Financial Controller

    MBDA
    • Stevenage
    • Competitive Salary & Benefits

    An opportunity has arisen to manage a diverse range of financial controlling activities within the Equipment Team (ET) and newly Centres of Excellence (CofEx) function...

    • Recruiter: MBDA

    Apply for this job

  • Weapon System Product Support Manager

    MBDA
    • Stevenage
    • Competitive Salary & Benefits

    The Opportunity An opportunity has arisen within MBDA?s Customer Support & Services organisation for a strong competent leader to deliver a key Weapon capability primarily...

    • Recruiter: MBDA

    Apply for this job

More jobs ▶

Subscribe

Choose the way you would like to access the latest news and developments in your field.

Subscribe to E&T