Elizabeth Rigby and Pilita Clark
Britain faces three years of emergency measures to make sure the country’s
ageing electricity system can keep the lights on in winter, the energy
secretary has revealed.
Ed Davey has already approved plans to keep three power stations on standby
this winter and pay businesses to use less electricity after the country’s
cushion of spare generating capacity sank to 4 per cent, compared with 17
per cent three years ago.
These measures will add 2 percentage points to capacity margins, which was
comfortably above the government’s reliability standards, he said. But the
energy department has looked at keeping such steps in place for much longer
Mr Davey said, in an interview with the Financial Times.
“We’re planning currently for two years but of course we’ve left ourselves
the flexibility, as you would expect, to have another year if we felt we
needed it,” he said.
The news came as Mr Davey prepares to make energy security the central
theme of his annual energy statement in the House of Commons on Thursday,
after a spate of power station fires and outages raised fears of possible
blackouts.
Four nuclear reactors at Hartlepool and Heysham shut down in August after a
defect was discovered.
A fire last month at the Didcot B gas-fired plant in Oxfordshire, one of
the biggest power stations in the UK, followed other fires at Ironbridge
and Ferrybridge.
Mr Davey said the loss of 600 megawatts of generating capacity at Didcot in
a big fire may have looked alarming but the plant was now coming back
online and National Grid, the power system operator, was used to dealing
with such events. The Didcot operator, RWE, said the complex was operating
at 80 per cent capacity.
“When I asked National Grid about how I should view Didcot B in terms of an
unplanned outage . . . they said we have an unplanned outage of 600MW one
or two times every week,” Mr Davey said. “This is business as usual. But
because there was a nice big fire that people could look at and point a
camera at, everyone got worried.”
He admitted that current levels of capacity were far from ideal, however,
“17 per cent was well above what is normal in a liberalised market. It has
been much more in the 8-10 per cent range, so we are below that.
“Power stations aren’t built in a day and since 2010 we have had a massive
increase in investment, the problem was the last government, including Ed
Miliband, were asleep on the job,” Mr Davey said.
The energy secretary said three of the four shut down nuclear reactors were
coming back online this month and although they may be operating at reduced
capacity, there was no reason for people to be worried about any threat of
blackouts this winter.
“The reason why I’m rather more calm than most people are about this is
we’ve looked at the numbers in detail, we’ve talked to National Grid, we’ve
talked to Ofgem [the energy market regulator], we’ve been working at this
for several years and frankly we are going to be absolutely fine,” he said.
Mr Davey said his department had been planning for a capacity crunch for
years after inheriting an “energy crisis” from the previous Labour
government, which he said had not done enough to spur investment in the
country’s power plants, many of which are due to be retired in coming years.
A new system of capacity payment auctions designed to encourage more
gas-fired power generation is under way. But some have questioned the
length of time it has taken the government to put such measures in place.
John Cridland, director-general of the CBI employers’ body, told the
Financial Times that the big drop in the capacity margin was troubling
businesses.
“The sclerotic nature of our infrastructure investment actually has a
bigger implication: it reduces the capacity to create energy and builds a
bigger risk of us not having enough generation,” he said.
“We’ve got to get on with the capacity auction, we’ve got to get on with a
settlement of the emissions trading scheme, so that the price of carbon
generates sufficient investment, and all of that has got to feed in to the
Paris talks on climate change, where we need a global deal, so we don’t put
Europe at competitive risk.”
Mr Davey said the first capacity market auction would take place in
December. “We are going ahead on time and on schedule.”
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