The UK is going to be at greater risk of blackouts over the next two years, unless financial incentives are handed to companies building electricity generators, a new report has claimed.
The warning, issued by the Royal Academy of Engineering (RAE), came just a week after the National Grid announced that the chance of energy shortages and blackouts will be at its highest in six years this winter.
Blackouts are ‘unlikely’
However, both the National Grid and the RAE were quick to stress that blackouts are unlikely, stating that they would only happen if there was a sudden or unexpected change to energy supplies.
The latter would include factors such as an unplanned shut down of a power station, a prolonged period of cold weather such as that experienced in 2010 and 2011, or problems with the interconnectors bringing gas and electricity into the UK.
The RAE said that the warnings are still to be taken seriously, as all of these issues have been experienced in the UK in the past few years.
John Roberts, the former chairman of United Utilities who led the research, told the Guardian that the best way to alleviate these fears is to offer stronger incentives for electricity generators.
‘Energy companies have no legal obligation to keep the lights on’
“You will need to have incentives. Existing gas-fired power plants are not making money. The government needs to speak to these companies and find out what they need to keep generating [electricity],” he said.
“Energy companies have no legal obligation to keep the lights on. There will need to be incentives.”
He said that as old coal-fired power stations go out of commission, newer alternatives are not being brought in fast enough to fill the gap, which could lead to shortages after 2015.
However, the government may face problems if it tries to bring in further energy incentives, as these would undoubtedly be added to the bills consumers pay for their gas and electricity.
Subsidies have already been under severe scrutiny in the last few weeks, with SSE blaming them for the 8.2% price rise announced last week.
Any further hikes on bills caused by additional incentives for energy firms would only draw heat for the government from bill payers.
Government denies risk to supply this winter
With regards to the lights going out, the government was quick to respond, with a report from the Department of Energy and Climate Change (DECC), saying: “The lights are not going out. The government, National Grid and Ofgem are taking coordinated action to address challenges to security of supply. In the short term, National Grid is consulting on extending the existing system balancing tools to manage any risks in the middle of the decade.”
The government did, however, admit that while there is little chance of the lights actually going out, supplies will be pushed “close to their limits”.
It said the most dangerous period will come in the winter of 2014-2015, when any unexpected changes in the energy sector could cause supply problems.