Energy minister John Hayes has dismissed claims made by SSE chief Ian Marchant in yesterday’s press that the “lights will go out” with the government significantly underestimating the scale of the capacity crunch facing the country.
In a statement, Hayes said the government is “alive to the challenge facing us”, and measures contained in the Energy Bill currently before Parliament would draw in the investment necessary to provide “secure power supplies”.
“The amount of spare power available today is currently comfortable. As old infrastructure closes over the coming years, we expect this margin to reduce but we will make sure it stays manageable,” Hayes said in a statement.
“We are not complacent about this, which is why we have an insurance policy – the capacity market. We’re considering how and when this can best be used to bring about any necessary increase in supply or reduction in demand.”
Over the next year SSE will reduce its energy generation by 2000MW, and is postponing further investment in gas-fired electricity generation until at least 2015. Marchant said SSE’s reviewed operations were unlikely to have been included in an earlier analysis by Ofgem, where it forecasted a one in twelve chance of ‘the lights going out’.
“The government can reduce this risk very easily, by taking swift action to provide much greater clarity on its electricity market reforms and bringing forward capacity payments for existing plant from 2018 to 2014,” Marchant concluded.
As always, I would be very interested to hear your views.
