The fire last week at Didcot power station has led once again to cries of “the lights are going to go out this winter”. But people who ask whether or not the lights will go out are asking the wrong question. It is politically inconceivable to allow non-consensual power cuts to happen in the UK this winter; therefore the question we should be asking is, “how much is it going to cost us to keep the lights on, and are there ways of reducing the cost?”
When the Didcot B gas-fired plant unit caught fire, the UK electricity system lost around 680 Megawatts of power generation. There is as yet no indication of how long it will take to get the unit up and running again, but it could be out of action for the rest of the winter.[i] To put this in context, UK peak demand for electricity is usually just under 60 Gigawatts, meaning that the fire cost the UK around 1% of total peak electricity consumption.
The system is designed to deal with problems such as this; fires and faults at power stations are not so rare, and the UK has a spare capacity margin – a capacity cushion designed to deal with unexpected incidents such as fires – which ensures that the lights stay on even when power stations break.
However, what makes this event unusual is that it is the most recent in a chain of problems with big power stations. In February, a unit at Ironbridge was closed after a fire, and in July two units at Ferrybridge were also closed. Moreover, two nuclear reactors have been temporarily closed due to safety problems. So does this mean the lights are going to go out?
There is little doubt that the UK capacity margin is declining, and will continue to do so over the next few years.[ii] Yet a recent report showed that there is actually rather little agreement over what impact this will have on the security of UK electricity supply.[iii]
However, the debate around capacity margins tends to skate over the crucial issue of politics. Power cuts would be utterly unacceptable to the British public. In the 1970s, the ongoing capacity crisis caused by the miners’ strike was one of the key factors which eventually brought about a change of government, and no current government is going to risk their political legitimacy on this issue, especially not shortly before a general election.
Moreover, power cuts send a signal to businesses that a government is struggling to manage its infrastructure, which could deter investment. This means that the ‘chances of the lights going out’ is a misguided debate; instead, the question we should be asking is: how much is it going to cost to keep the lights on?
The new capacity market [iv] is currently getting a lot of attention in policy and academic circles. No-one is suggesting that procuring new capacity is going to be cheap; in fact, there are arguments to suggest that it may prove far more expensive than necessary. [v]
However, simultaneously Ofgem has revealed plans for a new package of contingency measures, including the National Grid’s new Supplemental Balancing Reserve, which for the first time includes plans for demand-side management to reduce peaks in energy demand and to allow our electricity system to work more efficiently.[vi] The media has framed these supplemental balancing mechanisms in highly negative terms, calling them ‘emergency measures’. But this is misleading; in fact, if we get it right, these demand-side measures could provide a much cheaper means of meeting the peaks in electricity demand.
Therefore, the fire at Didcot B power station provides an opportunity as well as a challenge. For the first time, the UK will get to find out how well its electricity system performs over winter with a slightly lower spare capacity margin. We can see how resilient our electricity system is to unexpected events such as fires. And more importantly, we get to find this out before we truly get into a problematic situation; after all, we still have most of our old coal and nuclear capacity up and running. For a long time, people have talked about focusing on the demand-side as well as the supply-side; well, this winter is our chance to do exactly that.
Emily Cox, Sussex Energy Group
Emily Cox is a PhD researcher with the Sussex Energy Group, focusing on electricity security in the context of a low-carbon transition. Her main research interests are energy security, UK electricity markets, stakeholder engagement and energy behaviour. She has recently worked as a researcher for the Royal Academy of Engineering, E.ON Technologies at the Ratcliffe-on-Soar power station, and the Oxford University Centre for the Environment. She has also worked for a variety of NGOs, including as a regional network coordinator for Greenpeace. Emily currently tutors an MSc course in Energy Policy for Sustainability at the University of Sussex.
[i] McKenna, J. (2014) “Fire halves Didcot capacity”. Process Engineering, 20 October 2014
[ii] Ofgem (2014) Electricity capacity assessment report 2014. Ofgem, London
[iii] Royal Academy of Engineering (2013) GB electricity capacity margin: a report by the Royal Academy of Engineering for the Council for Science and Technology. Royal Academy of Engineering, London
[iv] DECC (2014) Electricity Market Reform – Capacity market: detailed design proposals. Department of energy and Climate Change, London
[v] Newbery, D. and Grubb, M. (2014) The Final Hurdle?: Security of supply, the Capacity Mechanism and the role of interconnectors. EPRG Working Paper 1412 / Cambridge Working Paper in Economics 1433
[vi] Ofgem (2013) National Grid’s proposed new balancing services: draft impact assessment. Ofgem, London