UK energy supply is looking stretched

Outgoing chief executive of Ofgem, Alistair Buchanan, sparked a media discussion this month by stating that:
 

 “It’s horrendous serendipity that just at the time we have a squeeze on our power station capacity and turn to gas, the global markets may have a squeeze on their LNG”

This led to headlines such as in the Daily Telegraph "UK's energy reserves 'on a downhill ride - fast" and the Sunday Times "Running on Empty". So we are heading for a power supply crunch and a spike in energy pricing. 

The reasons are complicated and beyond the length of this blog to debate. However factors include:

• EU legislation requiring mothballing of coal power stations
• expiry of our existing nuclear power stations by the mid-2020's
• planning and local protests against and slowing new build capacity
• our increasing reliance upon imported gas; used in the splashily named 'dash for gas' gas-fired plants
• changes in energy policy
• costs associated with renewables and Green Deal measures.

By 2025, peak demand is estimated to match supply at around 60GW and with generating capacity falling to just under 50GW by 2028. So it is not scaremongering within the media to state that there is a crunch and that the consumer is going to end up footing a very large bill simply to keep the lights on.

The solutions to this problem are pressing but not simple. Anyone telling you that we can rely upon the abundance of shale gas, wave and wind, or nuclear probably fails to understand the economics of energy and the time required to develop new infrastructure in a mature economy. The solutions will be varied and, in my view, depend upon ourselves as much as government and the energy companies.

There is significant distrust in UK energy suppliers, as highlighted within a recent uSwitch survey "half of consumers don't trust energy suppliers"


which suggests that consumers will need to rely at least in part upon their own initiative to manage their energy bills.


So what can we do?
 
In part much depends upon our changing our energy expectations and consumption behaviours. 
The Green Deal is likely to require us to accept longer paybacks for conservation and improvement measures. And to think about conservation in non-monetary terms rather than how much money we can earn through such things as a solar tariff.

It will also require education regarding our consumption patterns and the changes that we might make in our daily lives that do not materially compromise our living standards and comfort but lead to more efficient home living.

What do you think? 

Let me know if you what your thoughts are