On Monday in the Times newspaper Steve Holliday, CEO of National Grid, joined the growing consensus by stating that the UK faces an electricity capacity shortfall by 2015 unless rates of build increase. This fact, known to most analysts for at least a year, is blamed by many on a government which they believe has scandalously mismanaged the UK electricity sector.
In May 2008 REF published a major analysis of the rates of decline, “Electricity Prices in the United Kingdom”, this work showed that Grid and Government had underestimated the effect of the EU Large Combustion Plant Directive in closing coal stations and overestimated the degree to which wind power could contribute firm, reliable, capacity.
Furthermore, REF has shown that the current energy policy, particularly the renewables policy, has radically destabilised investment in any firm technology other than gas.
However, future gas prices and availability are both giving investors grave cause for concern, and final investment decisions are now under question.
Dr John Constable, Director of Policy and Research for REF said: "Grid's intervention is welcome but long overdue. The UK's capacity crisis was completely foreseeable, and results from a combination of governmental neglect of the conventional sector and counterproductive hyper-subsidy for renewables. Yet, a few weeks back the energy minister Mike O'Brien appeared live on Radio 4 to tell us all that there was no capacity problem, and that the lights would "burn brighter" in 2015 than now. This was obviously incorrect at the time, and Mr O'Brien owes us all an apology."
For further information please contact Margareta Stanley on 020 7930 3636 or 07968 049 832 or email
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Notes for Editors
1. Renewable Energy Foundation is a UK registered charity supporting research into renewable and alternative energy. The Foundation is supported by private donation, and has no corporate membership or political affiliation.
2. Copies of Electricity Prices in the United Kingdom (May 2008) are available for free download from http://www.ref.org.uk/PublicationDetails/40
3. Copies of the briefing note UK Electricity System at Severe Risk 2010 to 2020 are available for free download from: http://www.ref.org.uk/PublicationDetails/45
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