LOOMING ENERGY CRISIS

 

 

Terry Macalister
Wednesday October 31, 2007
The Guardian

 

Britain faces the prospect of power shortages and soaring prices this winter after the National Grid warned of a shortfall in electricity-generating capacity yesterday. The alert coincides with a surge in gas prices, which are now 40% higher than in continental Europe, and the confirmation that a vital import plant in South Wales will not be operational this winter.

And it emerged last night that the energy minister, Malcolm Wicks, met power providers and users last week to discuss mounting concerns that the UK was heading into another winter of soaring prices and power shortages, similar to the one that forced some manufacturers to shut down capacity 24 months ago.

 

The warning by the Grid, which operates the pylons and other parts of the electricity transmission system, came days after it reassured ministers that an earlier alert was nothing to worry about and that there were no expectations of power blackouts this winter.

The fragility of the country's power infrastructure is partly the result of a series of breakdowns at the UK's ageing nuclear reactors. It is an embarrassment to the government, which has often insisted that two years of price peaks and insecurity would end in 2007 as Britain benefited from extra investment in pipelines and import facilities.

But yesterday the Grid carried a "transmission system warning" on its website calling for an extra 300 megawatts of capacity to ensure sufficient slack in the electricity supply system between the peak periods of 1600 GMT and 1930 GMT, when homeowners put the kettle on, turn on the television and make supper.

The company issued a similar warning on October 19 but insisted yesterday that these were precautionary and did not mean there was any immediate risk of a power cut. "This is just a tool to ensure we can deal with the unexpected. It is a normal part of the market working and not a reason for concern," said a spokesman.

Jeremy Nicholson, director of the Major Energy Users Council who attended the talks, said everyone had been caught by surprise by a recent 30% surge in the forward price of electricity and gas. "We are all trying to understand why the supply situation looked fairly good and yet prices have suddenly shot up."

The surge in wholesale prices is likely to encourage suppliers to pass on the burden to domestic users. Mark Todd, a spokesman for energyhelpline.com, which helps customers switch suppliers, says his contacts have told him to expect a 10% rise in gas and electricity bills after Christmas.

Gas is used directly by many of the steel, chemicals and paper manufacturers represented by Mr Nicholson but is also used to generate power to provide electricity. Gas prices are heavily influenced by the value of oil, which this week hit record levels of $93 a barrel, and also by availability.

A liquefied natural gas (LNG) plant being built by BG, formerly part of British Gas, at Milford Haven in South Wales, was expected to be finished this year but yesterday the company said industrial action by contractor staff and other difficulties had pushed back its completion to 2008 with "no definite date yet for opening".

Sources close to the company said there was no chance of the facility being able to bring in shiploads of LNG from Qatar to meet peak demand this winter.

There has also been uncertainty over the amount of gas coming into the market this winter from Norway's Ormen Lange field in the North Sea. The Langeled pipeline linking the field with an import plant at Easington, east Yorkshire, was opened last year and is taking some gas but it is unclear when it will be at full capacity.

 

Regulator warns of winter shortages. BRITAIN has been warned of the prospect of another winter of fuel shortages. As the Government published its Energy Review and highlighted concerns over gas supplies from overseas, Ofgem, the energy regulator, said that there was still “a great deal of uncertainty” about gas imports this winter. New projects to facilitate the importation of gas from Europe are on course to be finished this year, the regulator said.

However, Alistair Buchanan, chief executive of Ofgem, emphasised that there was no room for complacency. There have been concerns over whether repairs to Centrica’s Rough facility, which provides 80 per cent of Britain’s gas storage, would be completed in time for next winter after a fire in February. However, Centrica has assured Ofgem that Rough would be ready. “We know that Rough is expected to be filled in time for winter and this is certainly good news, but now is not the time for complacency as there is still a great deal of uncertainty about gas imports this winter and supplies could be tighter if pipes and terminals are not used to capacity or are delayed,” Mr Buchanan said. associated with portable generators, involve CO poisoning from generators used indoors or in partially-enclosed spaces.

Wholesale gas prices hit record highs last winter and National Grid issued an unprecedented warning about tight supply. Energy bills in the UK have risen sharply on the back of high wholesale prices over the past two years.

 

Independant Newspaper:
CBI chief warns of looming energy crisis
By Philip Thornton and Michael Harrison
Published: 20 July 2006

Industry faces the threat of another energy crisis this winter, the director general of the CBI warned yesterday.

Richard Lambert, who took over the reins at the employers' group this month, said he would be "rattling cages" in London and Brussels to prevent a repeat of power shortages that hit businesses last winter. His warning came a day after electricity prices trebled as National Grid warned that the margin of spare power generation capacity was under threat. Speaking during an official visit to Liverpool and Manchester, he said: "There is a real anxiety about this coming winter, over the supply and price of gas for energy-intensive industry.

 

Edinburgh Evening News:
16th Janurary 2006

Looming energy crisis could plunge UK into blackouts

THE UK faces a "mounting energy crisis", which could lead to blackouts, job losses and rocketing fuel bills, the leader of one of the country's biggest unions warned today.

Derek Simpson, general secretary of Amicus, said urgent action was needed after successive governments had "shied away" from taking decisions on future supplies of energy.

Amicus officials will meet tomorrow to plan a campaign seeking public support for nuclear power and clean coal technology.

Mr Simpson said: "The debate on the energy crisis is in limbo and we need urgent action or Britain will face the prospect of blackouts and soaring utility bills over the next five years.

"The Nation's energy needs will be hostage to politically unstable states unless the Government's energy plicy promotes clean coal technology and new nuclear power."

Energywatch said households across Britain were now paying 87% more for gas and 56% more for electricity than they were in January 2003.

The suppliers have blamed the soaring cost of wholesale gas they have to buy from abroad to sell on to customers here, now that the UK is a net importer of gas. Supplies in the North Sea have been dwindling for years with the UK now covering 15% of demand from overseas. That figure is expected to rise to 50% by 2010 and 85% by 2020. But problems with supply from Europe drove prices higher last winter and fears remain that gas could be withheld from the UK again this winter, despite calls from the European Commission and UK regulator Ofgem for a more open market.

Last month, energy minister Malcolm Wicks warned that gas would be just as scarce as last winter.
 
 
UK 'faces routine power blackouts'

Press Association
Guardian Unlimited

Britain could face a winter of power blackouts and price rises because of a "looming crisis" in the industry, one of the country's biggest trade unions claimed today.
Amicus, whose members come from the manufacturing and technology sectors, warned the government there was a "real possibility" of blackouts in large parts of the country because of serious problems with generating capacity.

11,000 homes hit by power failure

 

 

Terry Macalister
Wednesday October 31, 2007
The Guardian