The government needs to get behind gas-fired power stations if it is to ensure the nation’s energy security and prevent the lights going out in households across country, according to Energy UK, which represents the big six energy suppliers.
Angela Knight, chief executive of the energy industry trade body, said that feedback from the big six indicates that ministers need to speed up their plans to introduce a capacity market, which would encourage investment in new gas-fired power stations.
Ms Knight, whose organisation represents the likes of British Gas, EDF, EON, npower, ScottisPower and SSE, plus many smaller energy companies, says that the UK could face a shortfall in generating capacity if this does not occur.
She has written to energy secretary Ed Davey to urge him to consider a capacity mechanism as a matter of urgency, claiming it is the only way to eliminate risk and uncertainty in the sector and ensure that customers will not have the plug pulled on them.
“It is essential that market participants are given clarity on future market arrangements. The rules defining them should be agreed as quickly as possible,” the FT reports her as saying.
Over the next 10 years, the amount of generating capacity in the UK is set to fall by around 20% as older plants are closed down, though uncertainty regarding the coalition’s policies means that plans to replace the old plants with new nuclear reactors and offshore wind farms have been delayed.
The result is that fewer plants will be used to produce more energy, which could lead to a situation where the reserve margin of spare generating capacity in the country could fall to 5% from its current 15% by 2016.
This tight margin would mean that the country could be plunged into darkness in the event of a squeeze on gas supply, and is something the industry wants to avoid at all costs – but this may only be possible if the government takes action to avert it, Ms Knight argues.
Though ‘lights out Britain’ would be an unlikely scenario, delays over the nation’s future energy security mean it is far less implausible than it used to be.