The UK has enough energy capacity to meet demand – even on the coldest days when demand is highest, says Steve Holliday, the man who ran National Grid for a decade. He said news stories raising fears about blackouts should stop. His optimism is based on the government’s latest auction of capacity for power generation, which opens on Monday. Firms will bid for subsidies to provide back-up power when needed. The stand-by plants will run for a few days a year during extreme conditions. Much of the back-up will be provided by old gas and coal plants that would otherwise be scrapped. Funded by the bill-payer, they will offer a sort of power insurance policy. Mr Holliday, who was chief executive of National Grid until July 2016, forecasts that all future talk of blackouts will be made redundant by a revolution in flexible electricity, with customers using power when it is cheapest. One current weapon at National Grid’s disposal is a contract for flexible supply with firms which don’t manufacture continuously.
BBC 30th Jan 2017 read more »
Old coal, gas and nuclear power stations are to receive subsidy contracts worth hundreds of millions of pounds this week, under government plans to ensure the lights stay on next winter. The subsidies, which will be levied on energy bills, are to be awarded through the “capacity market” to companies that can guarantee their plants will be available when needed on winter weekday evenings. Analysts estimate that the scheme could cost from £650 million to £1.5 billion, leading to questions about whether it is value for money. A reverse auction will award the subsidies to the plants that offer to supply the required capacity for the lowest fee. All successful plants receive the price of the highest winning bid, which critics say represents a windfall to many that would have been generating anyway. Virtually all Britain’s nuclear reactors and gas-fired power plants are expected to win contracts. At least some coal plants will also be required to secure the capacity that the government wants, consultants at Cornwall say. Coal plants are likely to determine the price of the auction, as they face the highest running costs because they have to pay tax on carbon emissions. Some would be loss-making without the subsidy and have been under threat of closure. This means that having taxed coal plants to the brink of closure, and paying higher electricity prices as a result, the UK now faces paying extra through the capacity market to keep them running because it is yet to build enough replacement plants. ScotishPower want s changes to capacity auctions to support the construction of new gas plants, such as one that it wants to build in Kent.
Times 30th Jan 2017 read more »
One of the UK’s main energy policies has been criticised for enabling old and polluting coal-fired power stations to stay open. On Tuesday the government will hold its latest subsidy auction, which is designed to ensure Britain has enough energy over the winter of 2017-18. Analysts and critics expect a number of ageing coal stations will be successful in winning contracts, even though the government has said it intend to phase out all such stations by 2025. This week’s bidding process, to be held over four days, is taking place because the National Grid has identified a need for extra capacity next winter. It is supplementary to the longer-term T-4 capacity market auctions, which are usually held at the end of each year and involve power generators bidding for contracts they will need to deliver in four years’ time, allowing investors to plan ahead and build new power plants. Coal-powered energy generation has been falling in the UK. Last year, more electricity was generated from wind turbines. However, coal is still heavily relied on during days when there is little wind and high demand for electricity.
FT 29th Jan 2017 read more »