NCPA - National Center for Policy Analysis

U.K. Power Crunch

September 9, 2013

British authorities have been issuing some dire-sounding warnings. In February, the man then in charge of Ofgem, Britain's industry regulator, warned of an impending "near-crisis" of energy supply, calling the situation "horrendous" and likening it to being on a roller coaster headed "downhill -- fast." Deputy Minister Nick Clegg was quoted saying that he was working to "keep the lights on," says National Geographic.

The main reason for the possible crunch: Britain is closing a number of aging coal-fired plants -- as well as some oil and nuclear ones -- to meet EU environmental laws.

  • One fifth of the existing power stations are scheduled to close over the next 10 years.
  • According to Reuters, the United Kingdom is set to lose more than 12 gigawatts of generating capacity in the next two years.
  • Currently, the country operates 13 coal plants, but nearly half are slated to close by 2015, and all of them could be shut down by 2023, according to government figures.

Though Britain does face a bleak shortfall of energy in the coming years, "Consumers are more at risk from higher prices than blackouts," says Wilf Wilde, executive director of the Durham Energy Institute at Durham University.

Major industrial electricity users, such as makers of aluminum and fertilizer, might feel a heavier impact. Wilde says that larger power users face a 30 percent chance of losing power within the next few years because many of them have "interruptible contracts," paying a bit less for power while accepting that power suppliers can cut them off, if necessary.

But any blackouts that cause key industries to go dark, even for short periods, could greatly disrupt the U.K. economy and likely inflict lasting damage at the polls for whichever political party is in power.

Source: Thomas K. Grose, "As Coal Plants Shut Down, United Kingdom Faces a Power Crunch," National Geographic, August 29, 2013.


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