POWERCUTS

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The National Grid has released a report into the way things are headed for the UK's electricity supplies in the coming decade, and it's not good news. No matter what happens to fossil fuel prices, British electricity is going to cost a lot, lot more in the near future as consumers pay for huge new windfarms to be built, pay their owners extra to turn them off more and more often, pay the operators of normal powerplants more to provide backup for the windfarms and to cope with the damage caused by the windfarms to their equipment; pay yet more to get new interconnector cables to the Continent built, and pay again to support economically unviable storage technologies.

The report (pdf) assumes that by the year 2020 the UK's windfarm capacity will have increased by no less than seven times over today's level, which might, combined with increases in gas and nuclear, plus new interconnectors allowing more Continental imports, be enough to compensate for an anticipated halving of coal and the disappearance of oil-fired power stations. (Though one should note that this assumes that the big new windmills will achieve average load factors of 30%, which so far windfarms have failed and are failing to do, 25% is more likely.) At that point we will still be getting 80% of our electricity from non-renewable means: we will still, in fact, be using mainly coal and gas. But the arrival of these limited amounts of wind power is going to mean major effects on the grid and the electricity market. (Source: The Register, Jun/11)

National Grid has been forced to ask wind farms to shut down for the second time in a month because it's too windy. Seven wind farm operators switched off their turbines. National Grid said they were generating too much power as storms ripped across Scotland. It leaves taxpayers with yet another bill. National Grid has to pay wind farm operators compensation when asking them to stop the turbines. National Grid said, "It was very windy yesterday and there was some curtailment of wind generation."

Despite huge subsidies for wind farm operators, National Grid claims its network is not ready to handle the power surge in storms. Demand for electricity also drops off late at night. National Grid paid out almost £3 million to wind farm operators in compensation in mid-September when a dozen wind farms were shut for three nights in a row. Fred Olsen Renewables pocketed £1.2 million. The Grid spokesman insisted, "This is all a normal part of how we balance the electricity transmission system and manage constraints on the network." (Source: The Sun, Oct/11)

Two million households will receive discounts to their heating bills this winter as the government forces energy firms to help pensioners pay soaring gas and electricity costs. Ministers announced that 800,000 of the poorest pensioners will be among the first to receive the new Warm Home Discount, worth at least £120 this year. Payments are also expected to be made to disadvantaged families, the disabled and the long-term sick. Energy companies are to be required by law to give rebates totalling £1.1 billion over the next four years, three times as much as they provided under the previous voluntary arrangements.

The regulations introducing the new scheme are already in force, according to the Department for Energy and Climate Change. The Energy Secretary, Chris Huhne, said, “The Warm Home Discount will give the most vulnerable pensioners practical help to manage rising energy bills through an annual rebate. Energy companies will be required by law to provide this support.” The move follows warnings that consumers face steep rises in fuel bills. Last week, Scottish Power announced that prices will rise by up to 19%, increasing gas and electricity costs by up to £200 a year.

Other companies are expected to follow suit. Under a previous voluntary agreement between power companies and ministers, which ended in March, energy firms provided a total of £365 million in help over three years through a range of schemes. The new Warm Home Discount will provide £1.1 billion specifically through rebates over the next four years, targeted at the poorest households during the winter months. In the first year, energy firms are expected to put £250 million towards helping “vulnerable consumers” pay their fuel bills. (Source: Daily Telegraph, Jun/11)

The lights haven't started going out yet but Britains power industry is in crisis. Our dwindling North Sea supplies mean we will be importing gas by 2006 and oil by 2010. Our nuclear power stations are so old that, by 2025, just one of them will be working. The Government had the chance to address the unfolding emergency and blew it. Britain must replace a quarter of its electricity supply, currently generated by nuclear, in the next two decades. But electricity generators face huge financial problems after a collapse in prices, and none can afford to build new power stations. Britain's biggest power station Drax, in North Yorkshire, is more than £2billion in debt. Wind, solar and water energy will not be enough, and in 20 years time we could face regular power cuts.

Millions of homes in Britain could be hit by blackouts this winter if there is a prolonged cold snap. The prediction was made by the National Grid, which revealed that the "safety cushion" between peak electricity demand and generating capacity had fallen to dangerously low levels. It said that the danger of blackouts would be highest in the four weeks either side of Christmas. The problem stems, in part, from generating companies mothballing power stations because of the slump in wholesale electricity prices that followed a government shake-up of the market.

The report said that if there were blackouts this winter the cause would be the shortage of power stations. Britain came close to a power cut in the winter of 2002 when the safety cushion between demand and available capacity fell to 2% on the evening of 10 December. In normal circumstances, the grid likes to have a safety margin of at least 20%. This winter, the report calculated that the margin would fall to 7%, with 55.7 gigawatts of peak electricity demand against 59.5 gigawatts of available capacity.

Ofgem, the energy regulator, sought to play down the situation, saying that National Grid Transco "does not anticipate power cuts this winter". But Alistair Buchanan, Ofgem's chief executive, conceded that blackouts could not be ruled out. "No system can ever offer a 100% guarantee when faced with unexpected events," he said. Ofgem insisted that "market mechanisms" would ensure that there was always enough generating capacity to meet demand, and said that mothballed plants had already started to come back on line in response to a 25% increase in wholesale prices in the past 12 months.

Patricia Hewitt, the Secretary of State for Trade and Industry, has taken personal charge of Government plans to prevent blackouts this winter. Ms Hewitt chaired a meeting of senior Whitehall officials, which was convened to draw up contingency plans to avoid power cuts, should a prolonged cold snap test the electricity grid to the limit. As Secretary of State she has a legal responsibility for maintaining security of supply, along with the energy regulator Ofgem.

DTI sources said contingency plans to prevent power cuts would be one of the department's highest priorities this winter. These involve encouraging generators to make more plant available and keeping gas-fired power stations in operation. Plans to build 21 new power stations to prevent Britain being plunged into darkness by power cuts are in chaos. Some of the stations have not been completed despite being given the go-ahead FIVE YEARS AGO. Energy Minister Stephen Timms admitted that new power stations were either "not built" or "under construction"

Two energy firms have announced bumper profits with plans to squeeze more money out of shivering consumers. SSE raked in £287million in six months to September, while E.ON banked £257million in the first nine months of the year. But rises in wholesale gas and electricity prices meant profits were down on last year, so both firms have hit consumers with price hikes. SSE increased gas prices by an average of 18% and electricity by 11% on September 14, although it promised to freeze prices until next August, while E.ON raised the price of gas by18.1% and electricity 11.4%.

Three million homes with rival EDF Energy also face bigger bills. The French firm is raising gas by an average of 15.4% and electricity by 4.5%. SSE, which has axed nearly 1,300 staff in the past year, claimed it made a loss from its supply arm, with profits made in other parts of the business. However, full-year profits will be back up partly due to the price rises. Chairman Lord Smith said, “This is not a straightforward time in which to do business.” However, it raised its dividend payment by 7%. E.ON kept its profit breakdown secret, but insisted they were down in the supply part of the business. (Source: Daily Mirror, Nov/11)

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