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UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.
Electricity margins will tighten, then rise with new capacity market
The government is to procure a total of 53.3 GW of electricity generating capacity when it re-introduces a capacity market into the UK later this year; an amount that equates to more than 80% of peak electricity use in Great Britain. Together with renewables and other generation this will, says the Department of Energy and Climate Change (DECC), ensure there will be enough power to meet the demands of homes and businesses in the future.
The new Capacity Market is aimed at addressing Britain's medium-term electricity needs, ensuring power supplies towards the end of the decade. The first capacity market auction is to run this December, for delivery in 2018/19, and harks back to similar arrangements used in the UK in the decade following electricity privatisation; standard practice in many US states and in some EU countries, according to DECC.
Secretary of State for Energy and Climate Change Edward Davey said: ‘There was a real risk back in 2010 that an energy crunch would hit Britain in the middle of this decade and lead to damaging power cuts. But the excellent news is that with today's announcement we have the final piece of the jigsaw of our detailed energy security plans and can now say with confidence that we have defused the ticking time bomb of electricity supply risks we inherited. Britain is a world leader in energy security – leading in the EU and ahead of every other G7 country.’
Meanwhile, Ofgem has published its latest assessment of electricity capacity margins – the surplus of electricity generated compared with demand – for the shorter-term, which shows that electricity margins will tighten over the next two winters. But the probability of disconnections has reduced due to measures taken by Ofgem alongside National Grid and government, says the regulator.
Ofgem expects a reduction in the margins over the next two winters. Margins are still expected to drop to their lowest level in 2015/16 resulting from closure of older power stations. After this, the margins are expected to improve as new power stations are introduced.
News Item details
Journal title: Energy World
Countries: UK -
Organisation: The Department for Energy and Climate Change - UK Oil Portal
Subjects: Trading, Policy and Governance, Electricity, Power stations
