Professor Dieter Helm aptly predicted this energy shortfall–take a look at what he saidby Dieter Helm / June 28, 2013 / Leave a comment
Following the announcement by UK energy regulator Ofgem that the risk of power blackouts has increased, the National Grid–owners of the country’s electricity network–have suggested heavy consumers could be asked to lower their use between 4pm and 8pm on weekdays in the winter.
In light of this controversial proposal here are extracts from an article published in Prospect earlier this year from Dieter Helm, professor of energy policy at the University of Oxford.
His predictions on the state of UK’s energy supplies proved incredibly accurate.
Many of the problems, Professor Helm says, are grounded in our dated energy infrastructure:
“All our coal stations are pre-1980, and the first and second generations of nuclear power stations are coming to the end of their lives, if not already shut down. The renewables have made little contribution so far, and they are intermittent, so until mass storage comes along, they do not remove the need for conventional generation. More renewables means a higher total capacity is needed on the system, since when the wind doesn’t blow something else has to generate the electricity.
“It does not take a genius to work out that as the old stations close, and little else is added, eventually the gap between supply and demand will close up, with nasty consequences for prices. Even the regulator, Ofgem, appears to have finally realised this.”
Helm describes how policy makers in successive governments led us to this shortfall:
“Ofgem led the way by forcing through a set of ill-conceived market reforms at the end of the 1990s. Ofgem made the economic mistake of thinking that the electricity market would automatically guarantee security of supply, voluntarily creating the necessary excess supply margin of capacity to absorb demand shocks, and all without being paid for directly.
“From Margaret Beckett to Ed Miliband, Chris Huhne and now Ed Davey, a succession of politicians made things much worse with a deeply flawed underlying narrative and set of assumptions about future energy markets. The main components were: a conviction that oil and gas prices would go ever upwards as a result of “peak oil” and “peak gas” (the theory that fossil fuels are finite, so supply will inevitably decline, causing prices to rise); a belief that if only enough subsidy from customers was spent on the current generation of renewables they would become cost competitive, and make a difference to global warming; and a naivety about the relationship between energy efficiency and energy demand. From these beliefs followed the prediction early on in this government’s life that the current policies would lower total customers’ bills by 2020.
Read Professor Helm’s full article here (£).