By producing a report that discusses EU rules, green regulation, and the possibility of power shortages all in one go, Ofgem provided the Daily Mail with a perfect story over the weekend.
The Ofgem assessment examines the UK’s security of energy supply now, and over the next few years.
Unfortunately, the Mail misrepresents Ofgem’s conclusions in several important ways, producing an article which gives a misleading impression of an important piece of research.
Ofgem’s main conclusion is that the amount of spare generating capacity in the UK’s electricity system could fall from fourteen per cent in 2012/13 to just four per cent in 2015/16. The risk of a shortfall in electricity supply is at its highest in the winter of 2015/16, the regulator says.
This has potentially quite serious implications for the UK energy debate. The prospect of power shortages has rightly attracted attention from the media and politicians. Climate and energy minister Ed Davey referenced Ofgem’s conclusions in a speech this morning. At the same time, it’s obviously easy to overplay these kind of findings. So how accurate was the Mail’s interpretation?
1970s style blackouts?
The Mail headline hypes the threat of rolling blackouts to the UK energy supply:
“Britain ‘to be hit by 70s style blackouts within three years'”
The quote marks imply this is something Ofgem has said. But Ofgem hasn’t drawn comparisons with the rolling power shortages caused by strikes in the 1970s, and it hasn’t said blackouts will definitely occur within three years. In fact it’s not clear where this language comes from.
Ofgem finds that if the amount of spare generating capacity fall to four per cent as its central estimate projects:
“â?¦.the expected volume of demand that may not be met â?¦ equates to the annual demand of approximately a thousand households. However, the most likely implications are small, occasional shortfalls which could be dealt with by National Grid through demand-side action, with little or no impact on customers. The annual loss of supplies arising from transmission and distribution outages is typically more than three times this amount.”
Clearly, this isn’t a 1970’s style rolling blackout. But the report does go on to estimate that “customer disconnections” could occur “around 1 in 12 years”.
This seems to mean that domestic household disconnections might happen on average once every twelve years. But this doesn’t tell us much about how serious the disconnections would be, or how many people they would affect.
For comparison, Ofgem points out that this level of reliability is comparable:
“[with] the reliability criteria used by neighbouring European countries including France, Ireland and Belgium”
And the predicted capacity margin of four per cent is not unprecedented in the UK – Greenpeace’s energydesk blog points out that in 2005 and 2007 the system had about the same amount of slack – although with UK energy regulation going through a period of change at the moment, that could make for a different situation now.
EU Green rules – the LCPD
But why is the amount of spare capacity projected to fall? Coal power plant is closing as a result of a European policy called the Large Combustion Plant Directive (LCPD). According to the Mail’s interpretation, these “green rules” are “damaging” and “spawned out of a Brussels obsession with weaning European countries off coal power”.
What isn’t made clear in the Mail’s critique of “a greener energy policy”, is that the Large Combustion Plant Directive (LCPD) is not a piece of climate legislation. Rather, it is a pollution control measure, which limits emissions of pollutants that are harmful to health, such as sulphur dioxide, nitrogen oxides and dust particles.
Newer and less polluting plants are exempt. Older, dirtier power plants can comply with the LCPD by installing equipment to clean their emissions up. Alternatively, they can ‘opt-out’ of the directive. Any plant choosing to ‘opt-out’ will have a restricted number of hours of operation to burn through until the end of 2015, when it will have to close.
Eight UK coal power plant are due to close by 2015, but several more aim to shut before then. Companies are burning through their allowances faster because coal is cheap at the moment, which means that the coal plant are approaching their usage limits faster.
Ofgem’s report was undertaken in order to provide the secretary of state with accurate information about security of supply in the UK. It’s clearly important – both practically and politically – that such assessments are made. But the tendency in some parts of the media to hype the results and conjure apocalyptic visions of energy blackouts probably isn’t that helpful.