What the energy gap in London could mean to its residents by 2015

The London Assembly’s Environment Committee prides itself on being ahead of the curve. In December, the committee’s report on ‘Plugging the Energy Gap’ warned of a looming energy crisis – not just in London but across the United Kingdom.

The report concluded that in the medium term the UK faced a short fall in capacity for energy production soon due to the planned decommissioning of old nuclear power plants, growing energy demand and the long time scales involved in replacing power facilities.

The report argued that:

“To meet its energy needs and to reduce carbon emissions, the UK needs to invest hugely in energy infrastructure – an estimated £200 billion over the next decade.

This view was confirmed last week when Ofgem’s published its ‘Electricity Capacity Assessment’, which sets out the energy challenges facing the country.

It warned:

“The high level of spare capacity in the GB electricity market is set to end quite rapidly over the next few years… The impacts of replacing older coal and oil power stations under EU environmental legislation together with changes to the generation mix over the next decade pose new challenges to security of supply. Recent developments have strengthened this view. Indeed, power stations ‘opted out’ under the LCPD are using up their running hours faster than expected: most LCPD opted out plant will come off the system well before the 2015 deadline…”

The report continues:

“There will be a significant reduction in electricity supplies from coal and oil plants over the period, primarily driven by closures required by European environmental legislation. Reflecting this, estimated margins decline from around 14% this year to just over 4% by 2015/2016.”

The report is saying that, with all things staying as they are, spare capacity for energy production is likely to decline from 14 per cent as it is now, to just 4 per cent in 2015/16.

 It is important to note that this estimate assumes there will be no increase in imports from Europe before  2015 (which is unlikely). Actual spare capacity is therefore likely to be higher than 4 per cent (the report estimates that spare capacity will be between 9 and 20 per cent if European imports increase).

This report should be a spur for the government to expand energy capacity in the UK. The question is how we do this?

The answer is not more coal and oil fired power plants that choke our environment. The answer is to increase supply through expanding cleaner energy production and reducing demand through expanding building efficiency.

As the Environment Committee report agreed:

“Major investment needs include improving energy efficiency in Britain’s homes and other energy users, and new low-carbon electricity generating capacity to replace aging and polluting power stations. The vast majority of the investment will need to come from the private sector, but public policies will need to play a role in identifying opportunities and providing incentives to the market.”

 In particular, this means:

• Increasing government support to get district heating schemes in the ground through subsidies and planning incentives.
• Getting the Green Deal right and hugely expanding the number of buildings of all types retrofitted.
• Investing in renewable energy and in the green industries.

The government must act now to secure a future for the UK that balances both energy demand and the need to avoid climate change.

The stakes are far too high for the issue to be kicked into the long grass.