When will the lights go out?

In the UK and some other countries the maximum demand on our supply network is perilously close to the supply capacity. In the UK we have a total supply capacity of 80 Gigawatts, and only around 67GW is available at any one time according to OFGEM director-general Alistair Buchanan. The maximum demand last winter was 60.5GW and the peak summer demand isn’t much less. It would only take a prolonged cold spell or a power station failure to drop the supply capacity below our maximum demand.

What this means in practice to an individual customer is that there is an increased risk of outages or voltage dips. It has been predicted that this could be a one in twelve chance of losing power in a year for any customer by 2015 and an increasing risk until either the supply capacity is increased or demand is cut. In the UK we are closing our coal fired power stations, decommissioning our old nuclear stations and not building new capacity fast enough to replace them. Read more about this in The Spectator.

Last week OFGEM published electricity supply and demand forecasts, showing that spare capacity has fallen as more gas-fired plants have been mothballed. It reiterated warnings that even if blackouts are avoided, power prices will rise steeply.  With the UK generation capacity margin likely to drop to 2% by 2015 the competition for supplies is likely to push prices up by 20%. Read more in The Telegraph.

Graph taken from Bill Wright’s presentation given at BSRIA Workshop

The profile of generation capacity over the next ten years is affected by political decisions such as closure of coal-fired power stations, extending the life of old nuclear stations, availability of imported gas, introduction of fracking for shale gas and planning permission for renewable energy.

Businesses need to prepare for the increased risk to protect their business continuity. At a recent BSRIA workshop, business leaders talked about how they could respond to the risks and the knock-on effects of power outages.

There are two main approaches:

• reducing demand, including demand side management
• adapting to a less reliable power supply with standby power.

But the effects of power outage on security of supplies, transport and even public order and crime need to be considered.  The process of planning for outages and continuity of power is part of a more general process of Business Continuity Management, for which there is a British Standard Code of Practice, BS25999.  This Standard covers all the threats to business continuity, but with the risk of power loss to a business and its supply chain and the effects of power loss on staff, customers and the public there may be a need to re-assess the risks and amend the business continuity plan.

OFGEM are hosting a Working Group to develop solutions to network capacity problems using the Low Carbon Networks Fund.  Their recent seminar presented the results of commercial and domestic demonstration projects.  The domestic demand peaks at nearly double the daytime demand between 4pm and 8pm on weekdays.  The early part of this peak coincides with the last hour of the working day so commercial demand is also high.  Various approaches to demand management are being trialled in different areas of the UK including incentives and variable pricing.

There are incentives for customers agreeing to cut their demand when local supply nears capacity.  These are set up locally with different priorities, such as the Thames Valley Vision which utilises Automated Demand Response and Business Consumer Consortia along with energy storage to reduce peak demands and avoid the need for supply network reinforcement.

In summary, the UK electricity supply network is expected to become less reliable and this will affect consumers as soon as 2015.  If consumers don’t do something they are likely to be hit by power cuts more often.  Solutions include planning for power failures, checking the reliability of standby systems, negotiating demand reduction facilities or permanently reducing demand.

BSRIA is keen to work with building operators, manufacturers, network operators, consultants and anyone involved in power continuity management.