Debate needed over price of avoiding blackouts

Former Tory MP calls for greater transparency over cost of security of supply

A public debate is needed over how much consumers and taxpayers are willing to spend to avoid blackouts, an ex-Tory MP has argued.

There must be greater transparency over the cost of ensuring security of supply as the power system undergoes transformation, Laura Sandys told delegates at the Utility Week Energy Summit in London.

“I think there does have to be a much bigger debate about the cost of security of supply and what we mean by that,” said Sandys, a former member of the energy and climate change committee and now chief executive of consultancy Challenging Ideas.

Speaking as part of a discussion of pragmatic medium-term energy policy, she said the industry is trying to replicate the “perfect system” Britain currently has with regards to security of supply. “Is it over-engineered?”, she questioned. “I’m not answering the question but I think it needs to be posed.”

Panel chair and BBC environment analyst Roger Harrabin said he, as a domestic consumer, probably wouldn’t be too fussed by the occasional brief blackout.

“My laptop would still be operating because it’s got its own battery. The fridge wouldn’t defrost. The freezer wouldn’t defrost. The oven would keep on cooking because it’s well insulated. I wouldn’t have any lights but maybe I’d have some battery lights or some candles.

“It wouldn’t be the end of the world, but we treat it like it would be,” he added.

However, Harrabin questioned how a debate could ever begin given the “absolute, set in concrete, nature of the mantra - the lights must never go out.”

Sandys replied that the main barrier to discussion is a lack of transparency: “One thing that has to happen, particularly as we go through this transition, is we need to understand both as consumers and overall as a sector how much it is really costing us.”

She said there also needs to be debate over how the costs are paid; whether by consumers through energy bills or by taxpayers from the public purse.

Tom Glover, chief commercial officer for supply and trading at RWE, pushed back on Harrabin’s suggestion that many domestic consumers could, like him, cope with the odd power cut.

“When you look at the security requirements of the system, consumers now have a much higher requirement for security because their whole life is dependent on their smart phone… Because of our modern economy security of supply is getting more important.”

Environmental think tank Sandbag has previously warned policy-makers against “gold-plating” the capacity market by setting excessive procurement targets. 

Author: Tom Grimwood,
Channel: Customers , Policy & Regulation
Tags: Trading , RWE

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