Crumbling energy network poses threat to UK’s industry

Author

Alan Tovey Industry Editor

November 4, 2014

EEF research discovers more than a quarter of Britain’s manufacturers rate UK power system as poor

Britain’s ageing power network is holding back the country’s industrial base with a quarter of manufacturers rating it as inadequate, with some of them fearing they could face damaging energy shortages.

A fifth of them are calling on the Government to make upgrading Britain’s power supplies the top priority when it comes to investing in infrastructure, according to research by EEF, the trade association for Britain’s manufacturers.

The finding comes just weeks after a fire at Didcot B, a gas-fired power station in Oxfordshire, raised the spectre of Britain facing blackouts and surging energy prices this winter.

In September National Grid said it was preparing emergency measures to fire up mothballed power plants as a last resort in an attempt to keep the UK’s lights on.

Terry Scuoler, EEF chief executive, said: “The fact we’ve had to introduce emergency measures to keep the lights on is testament to the failure of successive governments to grasp the nettle and plan more effectively to support the UK’s energy infrastructure.

“While we may have limited spare capacity this winter the real concern remains for next year when the margin is due to drop even further.

“A particularly cold winter, unfavourable conditions for renewable generation and unexpected closure of power stations could leave domestic and industrial users very exposed to power shortages.”

The precarious nature of the UK’s energy supply was highlighted when In October when a fire at Dicot power station cut the country’s reserve generation capacity to a narrow margin.

How Britain’s power plants are shutting down

 

UK Energy Infographic

Manufacturers have long complained about the high cost of energy in the UK compared with charges faced by competitors abroad, and EEF has also attacked what its chairman Martin Temple called the “insane economics” of power pricing policies.

These include the price of energy rocketing at times of peak demand. Known as “triad” periods, these are hard to predict and Mr Temple said companies who miscalculate when they will occur can face paying 300 times the normal amount for their power.

The level of concern about supplies came in a survey on Britain’s infrastructure which also revealed that 14pc of manufacturers believe energy supplies in Britain have deteriorated in the past two years, while just 2pc think they have improved.

Heavy engineering group Sheffield Forgemasters is an intensive user of energy that has to balance triad costs with its power usage. Peter Birtles, group director, said this forces the company to regularly shut down operations during these periods to avoid the risk of crippling energy costs.

“The UK’s buffer between average capacity and peak demand for electricity has fallen year-on-year to an all-time low of approximately 4pc through diminished supply,” he said. “We may well find that a harsh winter will force electricity providers to impose greater shutdown periods on businesses because demand could easily outstrip supply and exceed that 4pc margin.

“Unless the UK’s electricity generating capacity is radically improved over the short-term, and with a realistic view on future demands and costs to industry, manufacturers will be under serious pressure to maintain their UK operations.”

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