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UK facing electricity supply gap of up to 55%, says report

The UK faces an electricity supply gap of between 40% to 55% by 2025, the Institution of Mechanical Engineers (IME) has said. 27 Jan 2016

The predicted gap is due to UK government policy of closing all coal-fired power stations by 2025, combined with the retirement of most of the country's nuclear plants and growing demand for power, the IME said in a report called Engineering the UK Electricity Gap.

The IME describes plans to plug the gap with combined cycle gas turbine (CCGT) plants as "unrealistic", as the  UK would need to build about 30 new CCGT plants in less than 10 years. In the past 10 years, the UK has only built four CCGT plants, it said.

"In addition, in 2005 twenty nuclear sites were listed for decommissioning, leaving a significant gap to be filled," the IME said.

The UK has neither the resources nor enough skilled people to build this many station in time, the report said.

A greater reliance on imports of electricity from Europe and Scandinavia is likely to lead to higher electricity costs and lower energy security, the IME said.

The UK's National Infrastructure Commission should assess the incentives offered to industry and the public to reduce energy use, and "urgently implement" changes to secure security of electricity supply with no coal-fired generation. These include investment in research and development activities for renewables, energy storage, combined heat and power and innovation in power station design and build, the IME said.

The government must also look at the capacity within the UK to build the 'most likely' new power infrastructure', the IME said. This will involve looking at timescales to build both conventional and unconventional facilities, and at the skills and knowledge available in the country, it said.

Jenifer Baxter, head of energy and environment at IME said: "Currently there are insufficient incentives for companies to invest in any sort of electricity infrastructure or innovation and worryingly even the government’s own energy calculator does not allow for the scenarios that new energy policy points towards. Under current policy, it is almost impossible for UK electricity demand to be met by 2025."

"Government needs to take urgent action to work with industry to create a clear pathway with timeframes and milestones for new electricity infrastructure to be built including fossil fuel plants, nuclear power, energy storage and combined heat and power. With CCS now out of the picture, new low carbon innovations must be supported over the course of the next 10 years," Baxter said.

"We need to ensure we have the right skills and knowledge in place to enable this key infrastructure to be built," she said.

Energy expert Lindsay Edwards of Pinsent Masons, the law firm behind, said the IME is correct that there is a need for investment in research for renewables, energy storage, combined heat and power and power station design, and energy innovation more generally.

"This has been hindered of late with the lack of certainty surrounding the government’s stance on renewables, and the recent cuts in subsidies for renewable generation," she said. "This points to the need for the industry to move towards and develop ‘post subsidy’ business models which will enable innovative energy solutions to compete commercially and ‘fill’ the supply gap that is predicted."

"The commercialisation of battery storage technologies will be key to the sector’s ability to do this: battery storage is currently the missing piece in the need to reconcile the gap between a future increase in the demand for electricity and the decline of traditional generation and must be a key focus of the government’s energy strategy in 2016," Edwards said.

In an open letter to the government this week, the Confederation of British Industry (CBI) called for "clear leadership and stable policy" in energy policy.

The UK needs a clear long-term frame work to let companies plan for construction projects into the next decade, and "we need to make sure the market is open to all technologies, including new onshore wind developments, where they have local support", the CBI said.

"To ensure the shift to more intermittent renewable energy doesn’t affect security of supply for homes and businesses, we need to look at how we use technologies to help store electricity and manage peak-time demand, and support the development of new gas and nuclear capacity to help underpin our power grid," the letter said.

"Finally, we also need an overhaul of complex regulations holding back investment in energy efficiency – so that the best intentions to support firms to reduce their energy use and carbon impact are not lost in bureaucratic ‘green tape’," the CBI said.