UK power supply unlikely to meet demand next winter warns bank

Caitlin Morrison
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The UK could face a shortfall in power generation in the 2016/2017 winter
BRITAIN is at risk of severe power shortages next winter, with available generation unlikely to meet demand.

The UK will have only 53 gigawatts (GW) of dispatchable generation available to meet forecast peak demand of around 56 GW in winter 2016/2017, according to research from investment bank Jefferies.

“This would be the first time in living memory that the UK could not cover peak demand with dispatchable generation,” Jefferies analysts said in a note published earlier this month.

The bank’s concerns followed the announcement that Eggborough Power may close its 2,000 megawatt coal-fired power station in March next year, due to economic conditions and a lack of government support.

Jefferies noted that the “rapid closure of the coal fleet” has so far had no impact on forward power prices, and said “the growing influence of renewables, National Grid's emergency capacity market measures, and weak demand may explain this”.

However, the bank also said that, with the closure of the coal fleet accelerating, and reserve margins negative, “a price shock following a security of supply event is clearly possible at some point”.