Blackouts likely next Christmas, MPs claim

Britain will face blackouts by next Christmas without “radical rehabilitation” of power markets, MPs have warned in a new report.

The alarmist publication by the British Infrastructure Group (BIG) of MPs is titled Electric Shock: Will The Christmas Lights Go Out Next Winter? It raises concerns over the “dangerously small electricity capacity margins that have been left in the wake of a decade of target led, interventionist energy policy.”

“With top officials suggesting candidly that some measure of energy austerity might be implemented to save costs, British energy policy will soon be, if it is not already, in crisis,” said BIG chair Grant Shapps.

The BIG report warned that the “safety buffer” this winter has fallen to just 0.1 per cent and said there is a “sustained danger” of intermittent blackouts for the foreseeable future “thanks to dwindling base capacity and freak weather events”.

However, the figure quoted is an out of date capacity margin from National Grid’s winter consultation document and doesn’t include the Supplemental Balancing Reserve (SBR).

“Our winter outlook report in October put the surplus margin for this winter at 6.6 per cent”, a National Grid spokesman told Utility Week in response to BIG’s claims. “We believe the margin is tight but manageable and that we have the right tools and services available, including extra power we can call on if we need it, for times of highest demand.”

The Electric Shock report was highly critical of the cost of the SBR, describing how it pays power stations not trading in the normal energy market “an exorbitant sum to be kept in stand-by mode over winter.” It also portrayed the use of demand-side response for backup capacity as “a partial return to the 1970s-style three-day week” and warned that government has underestimated the cost to consumers of the capacity market – it claimed this could be £30 per year by 2020 which is twice as much as the Department for Business Energy and Industrial Strategy has forecast.

BIG called for a “comprehensive rehabilitation of electricity markets” in order to bring consumer prices and capacity concerns under control.