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Ofgem warns of energy capacity crunch

Energy regulator Ofgem has warned the UK faces an energy capacity crunch as coal and oil-fired power stations come off line this year and costs for importing gas are set to rise, its outgoing chief executive Alistair Buchanan said yesterday.

Buchanan warned with over 4.5GW of oil and coal-fired power stations due to close over the coming months, coupled with delays in new nuclear and carbon capture and storage projects, leaves the UK more reliant on gas imports.

But he warned prices for importing gas will increase driven up by extra demand from Japan, India adding shale gas is unlikely to come online before 2020.

Buchanan said the “near crisis” would occur between 2015 and 2018 but said blackouts were “unlikely”.

Energy minister John Hayes Buchanan’s remarks came as “no surprise” adding the government is “determined to secure investment in new plant”.

“That’s why we are stepping up to the plate, by reforming the electricity market through the most radical Energy Bill in a generation, to ensure our energy security and to keep the lights on,” said Hayes.

Trade body Renewable Energy Association (REA) said the government needed to focus on deploying technologies that are “genuinely low carbon, cost-effective, and can be rapidly deployed before the capacity crunch hits”.

“The only technologies which meet all three of these criteria are renewable, such as biomass, onshore wind, solar PV and waste-to-energy technologies,” said REA head of external affairs Leonie Greene. “These need to be combined with intelligent energy efficiency and demand-side response measures, and sensible use of gas.”

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