UK faces greater power cut risk:
A utilities analyst at investment bank Societe Generale - and a qualified nuclear engineer, Mr Hives has been watching as nuclear utility British Energy has had to shut down six of its reactors at the same time for inspection or repairs. Two reactors each at Hinkley Point and Hartlepool in England, and at Hunterston in Scotland, are presently out of action. "I think the position this winter is potentially worse under the same temperature conditions than in previous winters," he told BBC Radio 4's File on 4 programme, to be broadcast on Tuesday. "We have British Energy reactors offline, and the UK's indigenous gas production is lower than in previous years, by 8-10% or so." Despite a new gas pipeline to Britain, Mr Hives said no more gas is available. "Yes, there is a new pipeline from Norway, and from next winter it will bring large volumes of gas, but this winter it's not operating," he said. "So there isn't more gas being produced than last year. Despite the pipeline being built, there is no extra gas." That makes the situation worse than it was last year, Mr Hives believes. "A third of the UK's electricity is gas-fired," he says. If we suffer gas shortages this winter there is an economic incentive on gas-fired generators to use that gas or sell it against the market and make money than make electricity from it." The Department of Trade and Industry, which has responsibility for energy policy, said that there was no reason to worry. "People should be reassured that the country always keeps a margin of spare generating capacity to help cater for circumstances such as this," a spokeswoman said. "We are never complacent, but we have no reason to expect blackouts this winter." But Dr Dieter Helm, one of Britain's leading energy economists, has highlighted what he believes is a chronic shortage of spare generating capacity. Dr Helm, of New College, Oxford, and an advisor to government and industry, said that last winter the energy minister was so concerned that he became involved in daily departmental efforts to monitor electricity supplies and check that enough power stations were available. "What sort of situation is it," Dr Helm said, "when the minister is running around every 10 minutes checking up if there's enough power stations available? "This is the sort of thing that happens in developing countries. Last winter there was a really severe problem and government ministers and officials were daily watching the margin to see if it was going to be quote 'alright'. "And that isn't a sensible position for any energy minister to be in." Dr Helm is less worried about power cuts than the potential impact on wholesale power prices, in the wake of British Energy's nuclear power problems. "What I do think will happen is that prices will be higher than they otherwise would have been because these stations have gone off the system and that means that all of us will pay for the consequence of not having enough spare capacity on the regime," he said. National Grid, however, said that the UK had plenty of spare capacity to see it through. "The margin of generation over peak demand reported in our winter consultation report in September was a healthy 22%," the electricity distribution firm said. "The margin is there precisely to deal with eventualities like this when generation becomes unexpectedly unavailable. "Taking off the currently unavailable British Energy plant would leave the margin at around 18% which - although it is always important to avoid complacency - is the sort of level it was around three years ago or so." Andy Spurr, deputy chief nuclear officer for British Energy said to have its reactors operating is good for the nation and good for British Energy. "However, we do not and we will never take risks with safety and therefore we're actually keeping these reactors off-line until we've repaired them and we've made safety cases to put them back on-line," he added. 6.12.06