Recent years have seen vastly increased interest in the UK's energy generation capacity with many warning of how the lights may well go out. This is not unfounded as there have been significant closures of conventional power plants due to new environmental legislation, ageing infrastructure and low commodity pricing. It has however for the moment been addressed through new service arrangements from National Grid, such as the 'Balancing Reserve' options (SBR & DSBR) as well as the Capacity Market auctions.
You could therefore have been forgive for thinking that any concerns had now beed addressed and that we were back on the road to 'Situation Normal.' Not according to a recent report from the law firm Bircham Dyson Bell. The report states the closure of 18 major power stations since 2012 has reduced the UK’s total capacity by almost 14GW to just over 86GW. It said Britain was on course to lose almost 7GW of further capacity by 2020 and yet another 18GW by 2030. While this is to some extent offset by renewable schemes such as wind and solar, these cant be guaranteed to producing at times of greatest need during the winter months.
Longannet, Ferrybridge and Rugeley coal-fired plants are all due to close this year. Eggborough will now stay open until next year after it was contracted into the Supplemental Balancing Reserve (SBR) for the winter of 2016/17. One of the four units at Fiddler’s Ferry has also been contracted into the SBR but the remaining three units are set to come offline this spring.
Quoted in 'Utility Week' - Angus Walker, head of government and infrastructure at Bircham Dyson Bell, said: “We have observed increasing concern in recent years that as old electricity generation comes offline, new power generators are not being built at a rate that is keeping pace.”
There are currently 18 projects of more than 50MW capacity which have been granted consent, according to the research. It said, with a combined capacity of less than 18GW, even if all are built and operational by the end of the next decade, National Grid will still be left with almost 19GW less capacity than in 2012.
Walker said: “Our research establishes the hard facts of how serious the situation is, finding that on current projections this is likely to result in a shortfall between supply and demand – in summary an energy crunch.”
A number of report contributors highlighted inconsistent policies and a lack of clarity from government as a cause of the projected shortfall. Energy UK chief executive Lawrence Slade said: “To encourage investment there must be certainty. We had that for a number of years and we saw tremendous investment flowing into the energy industry in this country.
“But it does not take much to undermine investor confidence. The cuts made, particularly to renewables, have been drastic and sudden. We need policy certainty and cross-party agreement.”