Seasonal electricity capacity drops to a seven year low

A new report from National Grid predicts that spare electricity capacity will be at a seven year low this winter.

In National Grid’s 2014/15 Winter Outlook electricity margins are shown to have decreased, with the average cold spell margin expected to be 4.1 per cent, a figure attributed to planned generator closures, breakdowns and new plant not coming online as quickly to replace them.

In response, National Grid said it is finalising contracts with Littlebrook, Rye House CCGT and Peterhead CCGT power stations to provide additional reserve under the Supplemental Balancing Reserve.

Together with the Demand Side Balancing Reserve that National Grid said it has already contracted, these will provide an additional 1.1GW of de-rated capacity to that assumed available in its base case, increasing the de-rated margin from 4.1 per cent to 6.1 per cent.

Gas, however, is said to be in a strong position this winter with supplies, storage and network capacity well in excess of anticipated maximum demand.

In a statement, Cordi O’Hara, director of Market Operation said: ‘The electricity margin has decreased compared to recent years, but the outlook remains manageable and well within the reliability standard set by government.

‘Our analysis shows gas supplies to be in a strong position. Supply sources are diverse, network capacity is healthy and gas storage is well stocked.’

Commenting on today’s announcement, Dr Colin Brown, director of Engineering at the Institution of Mechanical Engineers, said: ‘While we’re unlikely to see blackouts this winter, the drop in the amount of spare electricity capacity illustrated in National Grid’s new report is a wake-up call that shows how vital it is that we invest in new energy infrastructure.

‘Government must stop playing politics with our energy system and the environment and make clear exactly how it is going to ensure that the country’s future needs are affordably met.

‘It is only with this clarity that energy companies will have the confidence to invest in the infrastructure needed to keep the nation warm, lit, moving and working.  Without it we risk a spiral downwards where we achieve our energy balance by closing down our industries.’

National Grid’s Winter Outlook Report follows consultation with the energy industry, analysts, academics and energy policy experts to provide the energy market with a snapshot of the potential gas and electricity picture for the coming winter.