Electricity bills could go up by £30 each year by 2020 and power “rationed” due to “mismanagement” of the UK’s electricity networks and the increasing cost of emergency supplies, MPs have warned.
The British Infrastructure Group, led by former Conservative minister Grant Shapps, warned lights could go out across the country next winter because there is not enough spare capacity in the system to cope with higher demand.
There is just 0.1 per cent spare electricity in the current system, a dangerously small amount of headroom in case of emergencies over the winter months, the report warned.
It cost the National Grid 800 times more than the standard price to buy additional power to cope with potential shortages in 2015. In total the company will spend £122.4 million on emergency power this winter and costs are expected to rise in 2016/17.
As a result, National Grid is forced to pay a premium to keep power stations which do not operate most of the time in a state of readiness in case of shortages, costing millions of pounds in emergency payments.
The grid expects to switch to a new scheme for coping with extra demand in 2018/19, but this will cost £1.1 billion by 2020 forcing bills up by £30 a year, the report warned.
Hospitals and factories are also being asked to switch to back up diesel generators to ease pressure on the grid at peak times, leading to concerns about pollution.
Daniel Mahoney, head of economic research at the Centre for Policy Studies, said: “Mismanagement of energy policy – both from the European Union and the UK Government – has left the UK with desperately narrow capacity margins.”