Return of mothballed power stations eases blackout fears

Britain will avoid blackouts this winter, the Government said yesterday, as another electricity generator said it was bringing mothballed capacity back on line.

Patricia Hewitt, the Secretary of State for Trade and Industry, told a utilities conference yesterday that the country had a robust and well-regulated electricity system that would be able to meet demand. "What is clear is that the energy capacity outlook is not as dark and gloomy as some people would have us think. Generation capacity is rising as the market responds to higher prices."

Her comments came as International Power said it planned to restart a mothballed 250 megawatt unit at its Deeside power station in North Wales from next week. David Crane, International Power's chief executive, said: "We do not believe the UK faces a shortage of supply this winter."

International Power's move follows the announcement on Wednesday that Powergen has begun work to restart a 650 megawatt unit at its oil-fired Grain power station in Kent, even though it may run at a loss for the winter.

National Grid Transco forecast earlier this week that the safety margin of surplus capacity over peak demand this winter would fall to 7 per cent and could disappear altogether under certain circumstances.

The energy regulator Ofgem said yesterday that National Grid Transco had informed it that, following the return of mothballed plant, the safety cushion, based on a different set of calculations, was now estimated at 19-20 per cent.

Concern over Britain's ability to keep the lights on this winter has been heightened by the withdrawal of a large amount of generating capacity because of low prices and a series of power cuts over the summer. A number of senior executives within the industry have warned that a prolonged cold snap this winter could result in power cuts.

A National Grid Transco spokesman said the 19 per cent margin referred to installed capacity that was registered on the system, whereas the 7 per cent margin related to generators' estimates of the "likely real capability" this winter.