UK facing tight winter electricity supplies

UK is facing tight winter electricity supplies after several power stations were closed down. The National Grid plc. informed in a report published on Tuesday that its surplus of electricity supply over demand is much narrower now. However, it assures that it has measures in place to make sure lights don’t go out.

Soon after the National Grid’s announcement, power prices took a leap, with wholesale electricity prices for day-ahead deliveries rising to £52 per megawatt hour, a 22% increase.

In the last Oct-March period, the average surplus supply over peak demand was 5%. Current estimates say they could easily fall to 4.1%, the report informed.

The margin – the difference between available supply and demand – can fluctuate between 1.5% in 2005/6 to 17% in 2011/12.

According to the report, generating capacity in the middle of winter is expected to be 71.2 gigawatts (GW). However, when factoring in the availability of power stations and historic performance, a 58.2 GW capacity has been used to calculate the margin.

The National Grid estimates peak demand this winter will reach 53.6 GW, compared to 66 GW in 2005/6 and 60 GW last winter.

UK spare electricity capacity

Generating capacity this winter will be at a 7-year low. (Data source: National Power Grid plc.)

The report says there is a high likelihood of tight margins this winter, particularly if there is low wind or interconnector exports to Europe. “The outlook remains manageable and well within the reliability standard set by government,” it added.

The National Grid says it has some contingency plans in case margins get alarmingly tight, including a scheme to pay businesses to use less power between the Nov-Feb period, and encouraging utilities to make idle capacity available.

If things get really bad, the report says it has three power stations on standby in Scotland and England to provide electricity. Their combined capacity, at 1.1GW, could raise the available margin to up to 6.1%.

UK regulator Ofgem says it welcome’s the National Grid’s plans to make sure all Brits have enough electricity during the next Oct-March period.

Ofgem said in a statement on Tuesday:

“We are confident that National Gridhas the right levers to keep the lights on and maintain a risk of customer disconnections which is better than the reliability standard set by government. However, given the tighter margins there can never be any room for complacency and National Grid and the industry must remain vigilant at all times.”

The National Grid report emphasizes that its calculations do not assume there will be any disruptions to the exports of Russian natural gas.