BDC

Plant Closures Spell the End for UK Power Generation

Energy-Crunch

Law firm, Bircham Dyson Bell has reported that the UK faces what it describes as a “looming energy crunch” owing to the predicted loss of 25GW of generating capacity by 2030.

The report highlighted the closure of 18 major power stations since 2012, representing a reduction of the UK’s total capacity by 14GW to little over 86GW. It also claimed the UK was on course to lose a futher 7GW by 2020 and  another 18GW by 2030 if expected closures go ahead.

Coal-fired plants at Longannet, Ferrybridge and Rugeley are all due to close this year. Eggborough meanwhile has been temporarily saved from closure after it was contracted into the Supplemental Balancing Reserve (SBR) for the winter of 2016/17. Its future after next year, however, remains uncertain.

SBR has also contracted one of the four units at Fiddler’s Ferry although the three remaining units are due to come offline in a few short months.

“We have observed increasing concern in recent years that as old electricity generation comes offline, new power generators are not being built at a rate that is keeping pace,” Angus Walker, Head of Government and Infrastructure at Bircham Dyson Bell commented. “Our research establishes the hard facts of how serious the situation is, finding that on current projections this is likely to result in a shortfall between supply and demand – in summary an energy crunch.”

Despite documenting the promise of 18 new project which have been granted consent, the law firm’s image of the sector is somewhat bleak. It suggests that, with the upcoming plants having a combined generating capacity of less than 18GW, they will leave National Grid with a deficit of 19GW compared with 2012.

Contributors to the the report were quick to point out inconsistent governmental policies as a major cause of the predicted “energy crunch”. Lawrence Slade, Chief Executive of Energy UK insisted the sector was facing real uncertainty and a lack of investment as a result. He claimed: “The cuts made, particularly to renewables, have been drastic and sudden. We need policy certainty and cross-party agreement.”

It was just days ago that Energy UK recommended that the government review the Levy Control Framework (LCF) in order to provide clarify to companies and investors, a moved it hoped would inspire new confidence in energy generation.

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BDC 299 December 2022