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Green Madness: Power Bills May Rise Amid Winter Capacity Fears

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Press Association

Consumers will face higher energy bills to keep the lights on this winter as National Grid puts in place plans to ensure there is spare capacity in the system.

The closure of some power stations would have left a spare capacity of just 1.2%, and the electricity company has put mothballed plants on standby and is asking some industries to be ready to power down if needed.

The contingency measures for times of peak demand will secure 2.56GW of power and boost the capacity margin to 5.1%, the National Grid assessment shows, but has cost £36 million and will add 50p to the average consumer bill.

Last year’s power capacity margin was 4.1% without additional provisions, which raised the breathing space to 6.1%.

But mild windy weather, high levels of electricity imports from the continent and greater than expected levels of available power plants meant the capacity margin was “adequate”, and extra help to meet demand was not needed, the report said.

This winter the margins will be tighter, the assessment found, requiring more measures to be bought to balance the system and ensure the lights stay on.

Cordi O’Hara, National Grid’s director of market operation, said: “It’s clear that electricity margins for that coldest, darkest half hour of winter are currently tighter than they have been, due to power station closures.

“As system operator, we feel we’ve taken a sensible precaution again this winter to buy some extra services.

“Together with the tools we already use to balance the network these additional services will significantly increase the energy reserve available this winter.”

Archna Luthra, an energy expert at advice website moneysavingexpert.com, said the news would be grim news for hard-pressed consumers.

She said: “Any sort of energy price rise is unwelcome, even if it does mean the grid can cope with peaks of energy demand.

“But the truth is many are already massively overpaying. Last week the CMA report found that 70% of people are languishing on expensive fixed tariffs.

“Someone with typical usage on a big six standard tariff with a monthly direct debit right now pays around £1,160 a year – if they switched to the cheapest tariff it would be around £870 a year. Fifty pence is insignificant when a five-minute comparison can actually save you hundreds of pounds.”

Energy Minister Andrea Leadsom said: “Our priority is to ensure that British families and business have access to secure affordable energy supplies that they can rely on.

“National Grid have confirmed that our plan to power the economy is working – and it means that the lights will stay on this winter as well as making sure our homes and businesses have the gas and electricity they need in the future.”

National Grid has also released a series of four scenarios for how the UK’s energy system could look in the future.

But only one of the four scenarios, one in which green ambition is not restrained by financial limitations and new technology is embraced by society, will see the UK meeting its targets to cut emissions and tackle climate change.

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