Energy regulator to warn over blackouts

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The regulator is expected to publish electricity supply and demand forecasts within weeks, showing that spare capacity has fallen as more gas-fired plants have been mothballed. It is likely to reiterate warnings that even if blackouts are avoided, power prices will rise steeply.

Britain’s spare power margin will be so narrow by the winters of 2014-15 and 2015-16 that unexpected events such as more plant closures, nuclear reactor outages or unusually cold weather could drive household electricity bills up by as much as 20pc, Peter Atherton, an analyst at Liberum Capital, has warned.

Last year, Ofgem’s assessment showed that margins would fall from 14pc to 4pc by mid-decade and the risk of power cuts would increase from near-zero in 2012 to one-in-12 by 2015 and one-in-two if demand was very high.

Ofgem’s outgoing chief, Alistair Buchanan, wrote in The Telegraph in February that “avoiding power shortages will carry a price”.

Then, in March, power firm SSE said it was mothballing more gas plants and delaying investing in new ones, making the situation “even more critical” than Ofgem had predicted, according to the SSE chief executive Ian Marchant. He said it created the “very real risk of the lights going out”.

via Energy regulator to warn over blackouts – Telegraph.

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