Ofgem warns of power shortage risks by 2015
A report by Ofgem has shown that British electricity generation will have to be squeezed over the next four years. It has highlighted that the quantity of standby generation capacity of the National Grid could fall from 14% today to just 4% in 2015.
In its strongest warning yet, Ofgem cautioned of controlled disconnections and power shortages to residential properties and businesses to begin in 2015 as the UK has not done enough to ensure a continuous electricity supply. This is partly due to coal-fired power stations closing earlier than expected, forcing energy companies to import gas from other countries at higher prices.
Figures released reveal that energy companies need a massive cash investment of £200 billion to increase generation and improve gas storage, which currently stands at 5% of annual demand. This will incur high energy price rises for the consumer that many will be unable to afford.
There are pleas for the government to take high priority action to evade power shortages. Mike Clancy, the incoming General Secretary of the Prospect trade union, remarked that “[this] report highlights how imperative it is for the government to act now and introduce electricity market reform that ensures the program 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.”
The Chief Executive of Ofgem, Alistair Buchanan, emphasised carbon prices, the credit crunch and sustaining international supply as key areas to focus on, stressing that it is crucial that new ways to secure the energy supply to the UK are found.
In an attempt to minimise energy reduction concerns, homes and businesses will have to take measures to remain energy efficient. Despite facing the dual challenges of reducing consumer demand and lessening dramatic price rises in the future, Energy UK has promised to take whatever measures needed to keep the UK population with power.