The margin of spare electricity capacity in the UK is likely to be low this winter, an analysis from the National Grid has revealed. In its annual Winter Outlook Report (WOR), the electricity and gas network provider stated that power margins will be “tight” this cold season. The report, which is based on a consultation process and data provided by the energy industry, noted that the firm may have to use contingency measures in order to prevent power shortages as temperatures dip.
Lowest capacity reserve margin in a decade
The WOR revealed that the risk of electricity blackouts in the UK will be higher this winter than it has been in at least a decade. The National Grid stated that the capacity reserve margin of electricity would be around 1.2 percent and suggested there is a greater likelihood that it will need to use its “contingency balancing services” in order to prevent shortages. One of these measures is to pay major energy users to limit their consumption during periods of peak demand.
Responding to the report, Greenpeace scientist Doug Parr warned that the system may be stretched. Speaking to the Independent, he remarked: “Every year National Grid says it can keep the lights on, but every winter some still say our energy will struggle to cope.” The analysis may be particularly worrying for commercial energy consumers who are on interruptible contracts. Under the terms of these agreements, companies can be subject to interruptions in their power supply during times of high demand. They accept this potential disruption in exchange for either reduced overall energy prices or compensation payments when the power is cut.
To ensure they are still able to operate even when mains energy is unavailable, firms can use backup electricity generators. As generator specialists Advanced Diesel Engineering note, these solutions are utilised by a range of organisations, including data centres, petrochemical firms and supermarkets. Having an independent power source to fall back like this on makes companies less vulnerable to outages.
Possible price spikes
Also issuing a warning about potential power problems this winter, Ian Marchant, chairman of renewable energy company Infinis Energy, stated that because of the tight capacity margin, there is a “very realistic possibility” of mains power price spikes. In an interview with the Sunday Telegraph, he claimed that a prolonged spell of cold weather could see prices double, adding: “We have not had a seasonally cold winter for the last four or five years, and that will be the real test. If we have a normal winter we will be fine, it is if there is a sustained cold spell - that is when the system will get under stress.” Mr Marchant went on to note that he does not expect the lights to go out, but he believes there could be “very high spot prices” that result in commercial organisations having to ration demand.
Businesses and consumers across the UK will be keeping a close eye on developments in the energy sector this winter to see if the risk of shortages does rise.
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