The UK government will today set out Second World War-style measures to keep the lights on and avert power cuts as a “last resort”. The price to Britons will be high.
Factories will be asked to “voluntarily” shut down to save energy at peak times for homes, while others will be paid to provide their own backup power should they have a spare generator or two lying around. And as part of the government’s wider energy market reforms, electricity producers will be able to name their price for bringing mothballed fossil-fuel-powered plants back on line.
The problem is that the energy plants were closed due to compliance with EU environmental regulations, but the UK has failed to build adequate replacements. This means the country can barely cope with peak winter demand. Successive governments have chosen to build expensive, unreliable renewables instead – which can’t meet the nation’s peak energy needs.
In an interview ahead of a speech today, energy minister Ed Davey – a Liberal Democrat and Oxford philosophy, politics and economics graduate – said businesses would be “delighted” to be paid to go dark – and said the measures were good value compared to building new power stations.
Davey predicted the UK would not suffer power cuts, and he may be right. But the price to consumers will be high: with the UK paying far over the market rate for new fossil-fuel energy.
Gas plants have closed because they’re not economical to run when ticking along; when demand is under 57 per cent, the operator may as well close it. The government’s complex measures include a new “Capacity Market”, which encourages mothballed gas and coal plants to be pressed into action.
Energy market experts predict that because the UK’s need is so urgent, the producers will be able to demand a high price: “existing gas and coal plant (particularly older assets close to retirement) may have significant leverage in negotiating reserve contracts with Grid as the system capacity margin tightens,” consultants at Timera Energy noted this year.