Retiring nuclear power stations and a planned coal phase-out could leave the UK facing a huge electricity supply gap by 2025, says the Institution of Mechanical Engineers (IMechE).
In a five-page report, it says the coming electricity capacity shortage cannot be filled with new gas-fired power stations alone. It calls for a renewed focus on energy efficiency and reducing demand.
Meanwhile, a letter from the Confederation of British Industry (CBI) asks for stable government policy to help secure the investment we need to create the energy system of the future.
Does the UK face an electricity supply crisis? Carbon Brief explores the evidence.
The IMechE report has been very widely covered. The stories take IMechE’s analysis at face value, without questioning its findings.
A lead editorial in the Sun says:
The IMechE analysis is simplistic and its conclusions are disputed.
Its starting point is the UK’s planned coal phaseout by 2025. It also assumes that all of the UK’s nuclear power stations could close by 2025, despite the expectation that life extensions will keep them running longer.
Rather than engaging in detailed energy and economic modelling of the likely consequences of these developments, the IMechE report relies on data from a single day last December.
Lead author Dr Jenifer Baxter tells Carbon Brief:
Together, these sources provided roughly 40% of supplies, Baxter explains. Windfarms supplied 13%, which cannot be guaranteed. Hence, the range of 40%-55%.
Baxter says the report was “not a big research project. It’s just a small report based on information that’s easily accessible.”
The report goes on to say that 30 gas-fired power stations (combined cycle gas turbines, CCGTs) are needed to fill the supply gap it identifies. It adds that the UK has “neither the time, resources nor enough people with the right skills” to build these CCGTs in time for the 2025 coal phaseout.
To help square the circle, IMechE says, the government should renew its focus on energy efficiency and reducing demand for power.
Carbon Brief approached energy analysts, industry representatives and government sources to gauge views on the IMechE analysis. Several were unwilling to put their criticism on record.
Richard Howard, head of energy and environment at thinktank Policy Exchange, tells Carbon Brief:
IMechE says interconnectors will raise prices and reduce energy security. In contrast, Policy Exchange says interconnectors will increase energy security and reduce bills. Wholesale electricity prices are lower on the continent. IMechE presents no evidence that this will change.
Mateusz Wronski, research associate at consultancy Aurora Energy Research, tells Carbon Brief:
Another issue with IMechE analysis is that it assumes electricity demand will increase between now and 2025. In fact, the National Grid’s Future Energy Scenarios expect peak electricity demand to be effectively flat over the next 10 years. This follows a decade of steady demand reductions. In a letter to the Guardian, Andrew Warren, chairman of the British Energy Efficiency Federation argues that this trend could be continued with a sustained push towards on energy efficiency.
Coping with closure
Aurora has modelled the impacts of a UK coal phase-out, concluding that the power system could cope with closure by 2025, or even earlier, at minimal cost to consumers.
The UK already has a significant pipeline of capacity from offshore wind, additional interconnectors to other parts of Europe and new nuclear power stations, Wronski points out.
It also has a capacity market designed to guarantee sufficient supplies. While the scheme has its flaws — encouraging polluting small-scale diesel, for example — there is a general expectation that the UK’s tight electricity capacity margins will improve once the capacity market kicks in.
Monne Depraetere, european power analyst at Bloomberg New Energy Finance (BNEF), tells Carbon Brief:
The government wants to reform the scheme so to encourage new gas, though it’s worth repeating the view that the UK probably does not need large quantities of new baseload gas-fired generation.
The government’s own projections bear this out, forecasting only a small net increase in gas capacity. Depraetere says around 11GW of new gas might be needed over the next decade. At least 5GW of projects, able to start operating by winter 2019, failed to win capacity market contracts, he adds.
Lawrence Slade, chief executive of industry group Energy UK, tells Carbon Brief:
For all the criticism, there is a basic truth at the heart of the IMechE report. The UK’s electricity system is changing rapidly, the energy industry is being asked to invest to continue that transformation and yet there is little transparency over the details of government policy.
Newer technologies, including offshore wind and carbon capture and storage (CCS), need investment, the letter says. To keep costs down, the market should be open to all technologies, including onshore wind, it adds.
The UK must also look at the potential for energy storage and demand management, the CBI says, alongside unlocking investments in energy efficiency.
If the details of IMechE’s analysis are shaky, at least there seems to be agreement on the need to plan for the the UK’s energy future.
Friends of the Earth energy campaigner Simon Bullock says:
Byron Orme, research fellow at the Institute for Public Policy Research, says:
Amber Rudd, energy and climate change secretary says:
The statement was sent to journalists with a list of “the top 10 things the government is doing to secure investment in clean secure energy”. It reiterates the caveat that coal will only be phased out “if we’re confident that the shift to new gas can be achieved within the necessary timescales”.
Update 27/1 – We added comments from Monne Depraetere.
Update 27/1 16:30 – We corrected IMechE’s name to the “Institution of Mechanical Engineers”. We had called it the “Institute”. We also added a note on electricity demand.