Britain heading back to the dark ages

The UK is facing a tipping point over the next few years in its ability to generate enough power to satisfy an ever-increasing demand.

By Rowena Mason Published: 7:06PM BST 05 Sep 2009

Gas and oil produced from North Sea rigs may not be enough to prevent power cuts Photo: Getty Images
When California was hit with a spate of crippling power cuts eight years ago, it was not simply the fault of an unscrupulous energy supplier called Enron manipulating prices.
The power company was blamed for meddling with the market, but state politicians were also forced to admit that their lack of investment in new electricity plants had contributed to the shortages.
Rupert Soames, the chief executive of Aggreko, the FTSE 250 emergency power generator, says the UK must prepare seriously for the danger of being hit by similar blackouts within the next decade.
"It has happened before in developed countries and we should not kid ourselves that it cannot happen here," he said in an interview with The Sunday Telegraph.
"The UK has an unacceptably high risk of interrupted power supply and I have enormous doubt about whether new plants are going to be built in time."
Aggreko has already had to provide emergency power to governments in Spain, Greece, Asia, South America and Africa. Mr Soames does not want to see this happen in the UK, but fears that "a slow train crash" of energy shortages is on its way unless more action is taken.
His fears are not unfounded. It was revealed by The Daily Telegraph earlier this week that the Government's own figures suggest that there will be a 3000 megawatt hour shortage of supply by 2017 causing 1970s-style blackouts.
Over the next 10 years, one third of Britain's power-generating capacity needs to be replaced with cleaner fuels, as a result of European laws on pollution.
By 2025 the situation is expected to worsen with the shortfall hitting 7000 megawatt hours per year – the equivalent to an hour-long power cut for half of Britain.
Ed Miliband's Department of Energy and Climate Change has swiftly dismissed these ideas as alarmist, arguing that new renewable and gas plants will be able to cope.
Critics point out that the Government is going to have to persuade energy companies or other investors to build thousands of wind turbines, at least three potential new nuclear plants and a raft of cheaper gas stations if demand is to be met.
There are fundamental problems with leaving these decisions purely to the market, according Mr Soames.
The recession has meant that there is little incentive for private companies to start investing in new stations. And there is a growing sense that EdF, E.ON and RWE npower, the backers of new nuclear plants, may find that construction is uneconomic without levies on consumer bills – something ruled out by the Government.
Mr Soames' biggest worry is that existing nuclear stations may be forced to stay running for longer than is safe, with unknown consequences.
Most controversially, the Aggreko boss believes that until the UK makes concrete plans for tackling a shortage of power stations, national energy security ought to take a priority over the targets that say UK emissions must be reduced by 80pc from 1990 levels by 2050.
"I personally believe that meeting climate change goals are not incompatible with national energy security in the long run, but I think keeping the country running is more important," he said.
Some even believe that expecting the power to flow seamlessly until 2017 may be unduly optimistic. Nick Campbell, an analyst at the energy consultants Inenco, has calculated that the energy gap could start in 2012 – just three years away and five years earlier than the Government admits.
The problem lies in the European Union's decree that Britain's dirtiest power stations – the old-style coal and oil generation plants – must be shut down not at a certain date, but after a certain number of hours. These plants, which are used as back-up generators for times of peak demand, are expected to shut in about 2015.
However, a number of outages at nuclear power plants mean these stations have already been burning through their allocated number of hours far more quickly than forecast. In fact, six out of ten may be forced to stop generation long before they are due to be decommissioned in six years' time.
"Alternative forms of generation will need to be online way before these nine coal-fired plants reach their 2015 deadline or the generation gap will occur at some point between 2012 and 2015," said Mr Campbell.
Greg Clark, the shadow energy and climate change secretary, has also pointed out that the scale of the blackouts could be three times worse than Government predictions. Some of the modelling assumes little change in electricity demand until to 2020 and takes for granted a rapid increase in wind farm capacity.
Dr Jon Gibbins, an energy technology expert from Imperial College, London, has been warning for years that the country faces an energy crisis, but says the situation is now growing more grave.
"The electricity industry has been sweating assets for a long time and now it's just about at the point of running out," he said.
"Policies at the moment just look like somebody in a Government office making up numbers."
He is particularly worried that Britain has left it late to start approving new nuclear stations, leaving the country with a glut of gas-fired power stations and intermittent renewable sources for some years.
An over-reliance on gas-fired stations also leaves the UK vulnerable to the whims of politically unstable gas-producing regions such as Russia and the Middle East as Britain's North Sea reserves deplete, Dr Gibbins explains. Most will be imported via pipeline from Norway, but extra gas for winter needs to be shipped in expensive liquefied form.
"We could be left with only renewables and gas plants for a while," Dr Gibbins said. "There's a distinct possibility that we won't be able to get enough gas. We have been lulled into a false sense of security by low gas prices during the recession, but the trend is that it will get more expensive."
In the long term, electricity demand is only likely to increase. Gas boilers and the transport system will be expected to go electric if the UK has a chance of hitting emissions targets, piling more pressure on the network.
Chris Bennett, future transmission manager at National Grid – who is not unduly worried about shortages – is responsible for considering how to "flex demand" as the network operator works out how to balance changing consumption patterns.
Smart meters, which monitor how household energy is used, could be used to switch refrigerators on and off, allow washing machines to run at off-peak times and make sure electric cars are charged overnight.
However, sceptics worry that a so-called "intelligent grid" could also be used to ration consumers in the event of insufficient capacity.
The power companies themselves are often wary of talking about future supply problems, but some, such as British Gas's owner Centrica, have been buying up North Sea assets in preparation for the "dash for gas".
However, E.ON points out that the recession has caused a 4pc drop in demand for electricity, as industrial customers close operations.
"We have got an extra five years or so to think about this now," said a spokesman for the power company. "Many manufacturing bases have stopped operating and activity won't return to normal for some time."
Other experts note with a touch of cynicism that it may be in the interests of the big six electricity and gas suppliers to operate with a shortage of electricity.
"Electricity providers can make more profits through their trading desks when prices are high than actually selling the power to homes," says one senior source in the energy trading industry. "There is sometimes a conflict of interest here."
In the last few months, the Government may slowly have been beginning to move in the right direction. Earlier this year, it widened the remit of the regulator, Ofgem, to include national energy security and promised to speed up the planning process that awards access to the national grid.
Reports from the CBI, the business body, and Malcolm Wicks, Gordon Brown's special representative on energy security, also recognised that Britain needs to start building more nuclear power stations.
But while the Government considers these reports and clings to its endless strategy documents, Britain's aged network and power stations lumber towards the end of their lives.
"Big infrastructure changes are not a happy country for politics," Mr Soames says. "But somebody needs to take responsibility and realise that renewable energy sources are not going to be enough in the medium term. We need fewer targets and more concrete plans or risk the lights going out over Britain."