The UK’s electricity capacity is likely to be stretched close to its limits next winter as old generating plants begin to close.
A government-commissioned study into the electricity system published today by the Royal Academy of Engineering predicts an increasing risk of power cuts as the capacity margin shrinks to potentially unacceptably low levels within this decade.
While the study found that the system should be able to cover projected levels of demand, events such as low wind, cold weather and unplanned plant outages could put the country's power supply at serious risk.
Dr John Roberts, chairman of the report's working group, said: "In the next decade, several coal and oil-fired power stations will be forced to close if they do not invest to comply with European regulation on pollution emissions.
"In addition to this, four nuclear plants are scheduled to close by 2019, further reducing the available capacity.
"Although the combined closures are not expected to bring the total available electricity capacity below the predicted peak demand, a reduced margin in the power available at any given time would reduce the flexibility of the system and increase the chances that otherwise manageable failures could jeopardise the country's power supply.
"The longer a low-capacity margin persists, the greater the chance of experiencing a combination of challenging events during that time."
The report calls on the government to set the market conditions to encourage private investment and secure a modern and sustainable service.
Uncertainties over the government’s planned Electricity Market Reform (EMR) and the current low profitability of gas plant have caused a hiatus in investment and interim measures, including demand-side responses, will be needed to maintain capacity in the period before reform takes place.
The report also calls on the government to resolve the EMR process as quickly as possible and settle uncertainties regarding the carbon price floor, a tax on fossil fuels used to generate electricity that came into effect in April.
"Modernising and decarbonising the system will come at a cost, with likely rises in the unit price of electricity and difficult decisions will need to be made," Dr Roberts said.
"This will only be achievable with the consent of the public and it is vital that government and industry work together to foster a constructive dialogue with the public about the challenges we face in achieving a low-carbon, secure and affordable energy system for the future."
The Institution of Engineering and Technology backed the findings of the report, which it says highlights the need to act now to avoid energy shortfalls.
“This is a useful report which looks at a worst case scenario where everything that could go wrong does go wrong and all at the same time,” said Dr Simon Harrison, chair of the IET Energy Policy Panel.
“Capacity is tightening and there is a need to progress market reform to the point where capacity gets built. However, the consequences of unfortunate combinations of events (e.g. cold winter combined with plant failures beyond normal levels) would not be national blackouts.
“There are a number of tools already in place to manage such situations, including voltage reductions, commercial contracts for short-term reductions of demand by industry, and in extremist controlled and localised power cuts for short periods.
“The IET has long argued for a balanced energy portfolio including nuclear and has drawn attention to the risks of uncertainty created by the lack of long-term strategic planning, which is causing potential generators to hold off investing in new plants until the position on government support is clearer."