From nowhere, a British power cuts crisis looms
Mothballed fossil fuel power stations may be brought back online to counter a short-term energy supply crisis, it emerged today.
Ofgem has increased its assessment of the risk of power cuts after noting a deteriorating supply-side outlook in the next few years.
Energy secretary Ed Davey told the Economist's energy summit in central London this morning that the government was taking action to prevent what Ofgem calls "involuntary customer disconnections".
"Barring a natural disaster or a technical failure that could mean brief outages, this combination of work we're announcing will mean the lights of the country will not stay on," he told an audience of energy experts.
"We will not allow a large shortfall in energy to trip the switch."
Amid an avalanche of energy announcements including the draft renewable strike price and confirmation that 2014 will see a capacity market introduced for electricity, the government also confirmed it was acting in response to the shrinking supply margins "in the middle of this decade".
Mothballed power plants could be reactivated alongside measures "incentivising flexible demand response", which could cost the taxpayer.
Ofgem warned in its assessment that uncertainty over projected falls in demand were contributing to the electricity crisis.
"We continue to expect that margins will decrease to potentially historically low levels in the middle of the decade and that the risk of electricity customer disconnections will appreciably increase, albeit from near-zero levels," it stated.
The watchdog said it did not anticipate power cuts – "providing the industry manages the problem effectively".
Coal power plants are unlikely to be included in the emergency measures because of environmental restrictions imposed by the European Union.
But Davey told journalists the UK was experiencing a "little boom of coal-based electricity" at present as producers use up their allowances before EU regulations come into force.
Energy minister Michael Fallon told Politics.co.uk: "It's up to Ofgem to see their way through it. What we have to do here is make sure the investment is going in, and confirming the capacity market is a big part of that."
