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Ofgem report discusses UK energy related risks

Ofgem has published its second report into UK electricity capacity. The report shows that electricity supplies are set to tighten faster than previously expected in the middle of this decade.

The risk to electricity supplies is projected to increase from the current near zero levels, although Ofgem does not consider disruption to supplies is imminent or likely, providing the industry manages the problem effectively.

Electricity margins could tighten in 2015-2016 to between around 2 and 5 per cent depending on demand. This means that the probability of a supply disruption increases from 1 in 47 years now to around 1 in 12 years for 2015/16 or lower. If the projected decline in demand does not materialise margins could fall to 2 percent.

Ofgem, DECC and National Grid have been working together to explore options that would provide consumers with additional safeguards against the increased risk to mid-decade security of supply. All three organizations agree that it is prudent to consider the case for additional tools to help National Grid balance the electricity network. These measures would give National Grid the option to buy extra demand-side response and reserve generation to balance the electricity network. Preventive action taken now will help protect supplies.

Ofgem’s Capacity Assessment Report is available here.

•Date: 3rd July 2013 • UK •Type: Article • Topic: Critical infrastructure protection

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