The National Grid Company (NGC) has warned in their half yearly financial statement on capacity margins and expected connection of new capacity of only 2500 GW by end of 2015.
Over the last twelve months there has been a net reduction in transmission connected capacity of 6GW, with more expected to close this year and up to end of 2015 as allotted operating hours for opted-out fossil fuel fired plant under LCPD close down. NGC now expects capacity margins to be less this winter than last and continue to decrease towards the middle of the decade.
Changes and challenges
The Royal Academy of Engineering recently published their GB Electricity Capacity Margin report which warned: “While the resulting capacity margin might appear adequate when considering average winter demand levels and average winter plant availabilities, a combination of external stress events could significantly increase the risk of power outages.”
Their report suggests that the cheap supply of shale gas in the US has driven down world prices for coal, making coal fired generation more profitable than gas. This change in the market has meant that a number of gas fired plants have been retired both temporarily and permanently, resulting in a further reduced capacity. Other changes, such as the decline in the fossil fuel reserves, are creating new challenges for UK energy security in the years ahead.
EDF’s chief executive, Vincent de Rivaz, has recently said that a “massive investment” was needed to prevent power cuts. “We need to invest in this country to keep the lights on,” de Rivaz concluded. Industry regulator Ofgem estimates that the required investment could top £110billion to keep the nation adequately supplied.
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