The government has dismissed a proposal that big shops and factories could be paid to cut their energy use to prevent shortages leading to blackouts. Electricity network owner National Grid has suggested large consumers could be asked to lower use between 16:00 and 20:00 on weekdays in the winter. It was responding to a warning from energy regulator Ofgem that the risk of power cuts has increased in the UK.
Energy Minister Michael Fallon insisted the lights would stay on. When asked if there was any truth to reports that big factories and businesses would be asked to cut their energy use in 2015, Mr Fallon replied: “No”.
He told BBC Two’s Newsnight programme: “I can assure you the lights are not going to go out.
“The latest [Ofgem] assessment has shown that the position is slightly worse than the previous assessment last year.
“The regulator Ofgem has got to make sure, with all the tools at its disposal – bringing some mothball plant back in action and back on line – that the lights stay on and they will.”
In an assessment released on Thursday, Ofgem said spare electricity production capacity in the UK could fall to 2% by 2015, increasing the risk of blackouts. The watchdog said more investment in power generation was needed to protect consumers. It said: “Ofgem’s analysis indicates a faster than anticipated tightening of electricity margins toward the middle of this decade.”
The global financial crisis, tough emissions targets, the UK’s increasing dependency on gas imports and the closure of ageing power stations were all contributing to the heightened risk of shortages, Ofgem said. It said measures could include negotiating with major power users for them to reduce demand during peak times in return for payment. Ofgem also suggested keeping some mothballed power plants in reserve in case of emergencies.
National Grid said it welcomed the Ofgem consultation on the proposed preventive measures and had been working with the Department of Energy and Climate Change.
“This does not mean that disruption is imminent or likely, but Ofgem, DECC and ourselves believe it appropriate to consider what measures could be taken in case margins deteriorate further,” National Grid said.
It acknowledged that dealing with tightening margins in the energy industry “sits outside of National Grid’s usual system operator role”, but added that “given our position in the industry and our experience, we’re happy to propose and consult on solutions.”
Reproduced from BBC News (http://www.bbc.co.uk/news/business-23093581)