Regulator says demand-supply cushion risks being wiped out in 18 months, prompting consultation on further subsidies to keep power stations open
The energy regulator has issued a new and more alarming warning about the potential for blackouts, saying Britain’s spare capacity margin could dwindle to zero as early as next year. The prediction from Ofgem has forced the infrastructure operator, National Grid, to consult on another round of subsidies to encourage companies to keep power stations open, a move likely to raise household energy bills further. It could also leave Britain further dependent at times of peak demand on “diesel farms”, which have been condemned by environmentalists as carbon-intensive and expensive to run.
Ofgem predicted earlier this week that capacity margins could fall as low as 1.2% this winter, but admitted in a consultation document on Friday that the demand-supply cushion risks being wiped out completely in 18 months. “Our analysis shows that the Lole (loss of load expectations) could range between two and 15 hours per year for our central view of the risks (corresponding to margins between 0% and 4%),” the document says with regard to the 2016-17 winter period.