According to Carbon Brief, coal use in 2014 dropped by 20%, which led to a 22% drop in demand during 2015. This year saw three large coal plants end their operations: Longannet, Ferrybridge C and Regeley, whilst a forth (Eggborogh) is not currently connected to the grid.
Plant closures are causing worry over whether or not supply will meet demand this winter, which led to National Grid taking preventative measures to meet the reliability standard set by the government.
In this article, we ask: how secure is our electricity supply this winter? What are the systems in place to help prevent blackouts? To answer these questions, we first need to establish how to quantify and measure the security of supply.
Loss of Load Expectation (LOLE)
LOLE is defined as the number of hours per year in which supply is not expected meet demand in the long-term. It’s a probabilistic approach that might vary depending on actual circumstances, and it does not necessarily amount to blackouts.
The government had proposed to set the GB reliability standard for LOLE at 3 hours per year.
LOLE this winter
According to Ofgem, uncertainty around the outlook for winter of 2016/2017 has increased (and are expected to increase further) due to plant closures and their effect on the market. They estimated a LOLE of up to 15 hours for this year, as can be seen in the figure below.
Steps to reduce the LOLE
National Grid employs tools to help manage such losses, namely the Supplemental Balancing Reserve (SBR) and Demand Side Balancing Reserve (DSBR). These tools would help balance the system and reduce LOLE, particularly last year (see figure below), where security of supply was brought back within the reliability standard set by the government.
Market response can also play a role in reducing the LOLE and securing supply. This can be in the form of interconnectors with Europe importing at maximum capacity, increasing the availability of generators, or retaining 1 GW of plant in the market.
Our view
Each year will carry many uncertainties; as more power plants close and end their service, supply will significantly decrease and fail to meet our demand. More secure energy generation systems must be employed in order to reinforce security.
We believe that onsite renewable energy generation is the answer; not only will it add security to our energy supply, it’ll also help save money on energy bills by eliminating the cost of transportation and transmission, which makes up around 20% of energy bills.
