Electricity: supply versus demand

Unless there is a dramatic cut in usage, customers are going to be paying sharply higher energy bills by 2020, according to the UK energy regulator Ofgem. Energy prices will rise by up to 25% and could spike even higher in the interim. “Life could get pretty cold”, says Ofgem chief executive, Alastair Buchanan, unless the UK implements an investment programme in the region of £200 billion to prevent demand outstripping supply.

Many large electricity generators are due to close in 2015 because they will be unable to meet stringent European Union emissions targets and air quality standards set down in the Large Combustion Plants Directive (LCPD). Of these, some will be existing nuclear plants, all but one of which will have closed by 2023 (Sizewell B).

Of course, there has been endless speculation about the creation of new nuclear plants, but it is unlikely that they can be built in time to avert a crisis. The UK has a legally-binding target to ensure 15% of our energy comes from renewable sources by 2020, but at the moment that figure is at about 7%.

There seems little doubt that current and immediate-future production is going to centre on traditional sources such as gas, fossil fuels and oil – with the attendant disadvantages of fluctuating commodity prices.



Supply Vs Demand
        The higher cost of gas and electricity may mean that increasing numbers of consumers are not able to afford adequate levels of energy to meet their requirements and that the competitiveness of industry and business are affected
- Source: Ofgem, Project Discovery
 

UK electricity supply in 2008

UK electricity supply in 2008, Oil 2%, Other renewables 3%, Coal 34%, Nuclear 16%, Hydro 1%, Wind 2%, Gas 44%, Other 1%, Net imports 1%, Hydro pumped storage 1%

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