A top Utility executive has embarrassed the company that runs Britain’s power supply – by exposing the high risk of power cuts this winter.
He says the risk of power shortages has been underestimated by ministers and the National Grid, with factory shutdowns and “politically unacceptable” price spikes more likely than had been feared, energy giant SSE has warned.
National Grid last month said that in a cold winter the UK’s electricity “margin” – the safety buffer between peak demand and supply – would fall to just 5pc, the lowest since 2007, as old power stations are switched off.
But Keith MacLean, SSE’s director of policy and research, warned: “We think that could easily flip to minus 5pc.”
“We are heading for a critical period. We worry that [the Department of Energy and Climate Change] and National Grid have been over-optimistic,” he said.
National Grid’s estimates of peak demand were too low, at 2GW below levels seen in December 2012, he said.
The Grid had also admitted it had been counting on supply from power stations that would not actually be available this winter – potentially taking away about 1.5GW or 2GW of supply, Mr MacLean said.
“It’s easy to see how you get from just about having enough, to not having quite enough,” he warned.
He said Britain would not face blackouts “unless National Grid really cocks up quite badly” as it had measures to manage demand, such as asking industrial sites to switch off.
But he said: “Is that really the answer we want when trying to drive a bit of growth into the economy? I don’t think it is.”
Power shortages would also mean that “the price is going to start spiking”, he said, resulting in levels that were “not politically acceptable… either for industry or certainly not for domestic consumers”.
SSE was the first energy giant to raise its prices this year, blaming rising costs of wholesale energy, network charges and green levies on bills for the 8.2pc increase.
Mr MacLean blamed politicians for the looming power crunch.
“We have an enormous number of policy interventions but they are creating an incredibly complex picture which no-one really is able to understand,” he told the Stationers’ Company Autumn Forum in London.
“We are moving to a centrally-planned system, but you try to find someone who thinks it’s their responsibility to say what that plan is, or find a copy of that plan, you’ll be looking for a long time.”
Gas plants are currently being mothballed because of “extremely unattractive” economics that means most are loss-making.
“The cheapest way to keep the lights on at the moment is to keep what we have got going and to stop any more plant being mothballed,” he said, suggesting the Government should bring forward a proposed “capacity mechanism” policy to pay plants to be available as back-up, which was only due to start operating in 2018.
A National Grid spokesman said: “Our report uses historical data and information from the market to outline scenarios for the coming winter. It’s not a prediction, but this year’s report does shows that the market has the capability to meet electricity and gas demand.”
A DECC spokesman said that National Grid estimated a capacity margin of about 8pc this winter, only falling to 5pc in high demand.
Regulator Ofgem estimates the margin to be about 6pc, while DECC’s own analysis suggests margins will be nearer 10pc.
The DECC spokesman said: “We have enough energy to meet our needs this winter. Our infrastructure can deliver more than we need and has coped well during recent very cold winter spells.”
