The ex-boss of National Grid, Steve Holliday, has said that no one should fear electricity blackouts as the UK has enough energy capacity to meet the UK’s needs – even on really cold days when demand is high. His upbeat statement is based on the government’s latest auction of capacity for power generation, happening this week. Companies will bid for subsidies to provide back-up power when required. Their stand-by plants will run for just a few days a year when there are extreme conditions. A lot of this back-up will be provided by old gas and coal plants that might otherwise be ditched. Funded by the bill-payer, they offer a power insurance policy of sorts.
Steve told BBC News: “It’s time for the headline of Blackout Britain to end – it’s simply wrong. We’ve been talking about blackouts for 15 years every time it gets cold, but it’s a scare story. The lights haven’t gone out yet and thanks to the measures the government is putting in place this week they definitely won’t go out in future. The UK has one of the most stable supplies of electricity in Europe.”
The head of the Energy Intensive Users Group (EIUG), which represents companies that use a lot of energy, Jeremy Nicholson, has voiced fears before about energy security but says the capacity auctions will secure supplies. He said: “The power industry makes a lot of noise about tight generating margins but somehow manages to provide plenty of capacity when it’s needed. The capacity issue is sorted now – frankly it should have happened 5-10 years ago. Our bigger concern now is the possibility that when margins are tight, the price will shoot through the roof.”
Energy UK is also confident about supply, saying: “We support the Capacity Market and we believe it will keep the lights on in Great Britain.”
Capacity auctions were originally introduced so that back-up supply was available from 2018, but the scheme was brought forward. Bidders who are successful will receive payments for keeping power stations available between November and February, even if they are not generating. Coal, gas and nuclear stations are able to bid for the payment, as well as demand reduction suppliers and interconnectors. Then the National Grid will juggle what’s needed when. A government spokesman said securing capacity to back up intermittent forms of energy like solar and wind might cost about £7 per year per household initially, reducing to £2 over the longer term. He said power shortages resulting in price surges would be much more costly. Generating margins were forecast to be tight for this winter, but there has been no problem, despite a long cold windless spell during which wind energy has produced around 1% of electricity demand. The highest daily percentage of wind power was over 20%.