Ofgem Electricity Capacity Assessment 2014

The Electricity Capacity Assessment is Ofgem’s annual report to the Secretary of State assessing the risks to electricity security of supply in Great Britain for the next five winters. Ofgem’s assessment is based on data from National Grid accompanied by its own analysis.

It suggests that, without the new measures introduced, the risks to the security of our electricity supply over the next five winters would be broadly consistent with those in last year’s report. Margins are expected to fall over the next two winters as older power stations close, before improving in the later years of the analysis.

The critical factor for IPU and its customers is the projected level of ‘spinning reserve’ (referred to as “capacity margin” in the report). This is defined as the excess of installed generation over demand. When the reserve falls there is a chance of brownouts or blackouts at peak times. While this is merely an inconvenience to domestic users it can be critical to datacentres, hospitals, call centres, banks, government departments, etc.

The broader picture is that the UK’s generating capacity has declined because older, ‘dirty’ power stations have been closed down before cleaner or renewable power sources come online. While the capacity margins are tight schemes like STOR (Short Term Operating Reserve) use diesel generators to provide backup power to the grid under the control of relays such as ComAp’s MainsPro and InteliPro.

Ofgem’s analysis takes availability factors into account when arriving at its projections for the UK’s capacity margin. Notable sections of the report include:

 

“As in our Electricity Capacity Assessment 2013, we expect a reduction in generation margins over the next two winters, with de-rated margins dropping to their lowest level in 2015/16 as a result of a reduction in supplies from conventional generation. There has been a sharp reduction in demand since last year, which National Grid believes comes from energy efficiency measures, an increase in generation connected to distribution networks, and demand reduction by the industrial and commercial sectors at times of peak demand. But this has been offset by a greater reduction in available electricity supply than previously expected.”

 

“National Grid’s scenarios show that the de-rated margins will drop until 2015/16, reaching a minimum of around 3%, and then recover.”

 

“Our sensitivity analysis shows that the de-rated margins could vary between around 2% and 8% in 2015/16. They could drop to around 2% if, for example, demand was higher than projected by National Grid. Fewer imports from mainland Europe and further plant closures or mothballs could also lead to the same outcome.”

 

“Under National Grid’s scenarios, loss of load expectation (LOLE) increases from less than 1 hour per year in 2014/15 to a maximum of around 3 to 5 hours per year in 2015/16. Our analysis shows a larger range of risks, from as much as 9 hours per year for a higher demand or lower supply, down to close to zero if, for example, there were full imports from mainland Europe.”

 

Further information is available from Ofgem.