The Thing Is: We'll have to burn the midnight oil to stop a loss of power

Click to follow
The Independent Online

Rush out to the hardware store and stock up on candles; it's going to be a long dark winter... The recent blackouts in London, New York and Birmingham have led some commentators - tabloid newspapers and distinguished professors alike - to draw pretty dramatic conclusions on what were, in reality, three freak events.

But Sir John Mogg, the new chairman of the energy regulator Ofgem, will attempt, this week, to shed some light on, er, whether the lights are about to go out, with the publication of a critical report.

The regulator will deliberately attempt to make it sound as boring and innocuous as possible, by naming it something like "system security strategies for winter". But the report will offer a definitive snapshot of exactly how precariously balanced Britain's electricity system is.

The good news is that Britain isn't on the brink of widespread blackouts. The bad news is that the country is inching towards serious problems with its electricity system.

The report will address supply and demand. Produced jointly with National Grid Transco (NGT), it will attempt to predict how much electricity we will use over the winter and match that up with the supply from the generators.

The margin at peak times last year was around 20 per cent - which is essentially a safety cushion should a power station go out of service. This was a few percentage points down on the previous winter.

And Ofgem and NGT are expected to predict that the margin will fall again this winter, perhaps to around 17-18 per cent.

Glenn Rickson, an editor of The Heren Report, an energy industry newsletter, says: "There is definitely less supply going into this winter than there was last year. National Grid has issued various warnings of supply shortfalls, but I don't think we will suffer blackouts just yet."

The reason for the narrowing margin between supply and demand is the wholesale price of electricity. While it has risen in recent months, it is still low enough to keep many power stations in mothballs, as electricity companies have been unable to make profits out of them.

Some companies - notably Powergen - have pledged to switch some stations back on. But when you tot up the extra electricity they will produce, it is relatively small.

So, barring a freak cold winter or a major problem at one of Britain's power stations, the lights will stay on and the candles will stay in the box.

But the Ofgem report will point to a worrying trend. Each winter, the safety cushion of extra supply to cover some sort of freak event is narrowing. Unless something radical is done to Britain's electricity market, the possibility of the lights going out on a regular basis will rise. Ofgem's Sir John Mogg will have to start burning the midnight oil to solve that one.

Comments