February 26, 2016 / 4:33 PM / 4 years ago

UK to face electricity supply crunch next winter - grid data

LONDON, Feb 26 (Reuters) - Britain faces an electricity supply shortage next winter, National Grid data showed, which could force the grid operator to seek extra reserves to make sure the lights stay on.

Forecast demand for electricity in Britain is higher than expected supply for a total of 11 weeks over winter 2016/17, the data published on the National Grid’s Balancing Market Report website showed on Thursday.

“This is the first time we have seen an official forecast that the UK will have a negative reserve margin for a sustained period next winter,” Peter Atherton, analyst at Jefferies investment bank said in a research note on Friday.

Britain’s electricity generation is under scrutiny as a plan to close coal-fired power plants by 2025 and weak economic conditions for investment in new gas plants needed to replace them has created concerns about power shortages.

Coal-fired power plants provided around a quarter of the country’s electricity last year but five plants capable of generating more than 8 gigawatts (GW) of electricity have over the last few months announced they will either close or reduce capacity this year.

National Grid has already contracted a reserve of 3.6 gigawatts (GW) of capacity under its so-called Strategic Balancing Reserve for the 2016/17 winter period which would be enough to cover the shortfall provided renewable generation forecasts are met.

“This is a moving picture with figures for nearly a year from now and a lot can happen between now and then,” a spokeswoman for National Grid said.

She said the figures do not include the reserve or the 3 GW of capacity that can be provided by electricity imports through the country’s power connections with France and the Netherlands.

However, Jefferies’ Atherton said the grid operator could still be forced to seek additional back-up reserves.

National Grid said further analysis of the grid’s plans for this winter would be provided in its Winter Consultation Report to be published in the summer.

Government data published on Thursday showed electricity generation in Britain fell to its lowest level in more than 20 years last year. (Reporting by Susanna Twidale; editing by Susan Thomas)

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