Europe's power supply on brink

Europe's security of electricity supply is facing a growing threat, with generating capacity ahead of rising demand by the lowest ever level, according to a report published today.
The average margin between supply and demand fell to 4.8% last year, a percentage point below the previous year's, said consulting group, Cap Gemini. "This low power margin is a wake-up call to the energy industry, government and regulators that security of supply in Europe is now under severe pressure."
Britain is among countries that have done most to tackle the problem. It raised generating capacity by 13% to increase the margin by one percentage point. The margin this winter will be 22% compared with 21% last winter, according to UK figures.
Despite Britain's relatively strong position, industry experts underline the need for continued investment to replace coal fired plant that does not meet new European regulations and ageing nuclear reactors. "In this country we are looking at £20bn worth of investment in power stations this side of 2020," said David Porter, chief executive of the Association of Electricity Producers.
This week Powergen parent E.ON UK said it had applied to build two units at its coal-fired station at Kingsnorth, Kent, which the company says would represent a £1bn investment. Yesterday RWE, which owns npower, said it was bringing another 500megawatt unit at its oil-fired Fawley plant in Hampshire back into service after being mothballed for more than a decade.
"Many of the country's older power stations are coming up to retirement age," said npower managing director of generation and renewables, Kevin Akhurst. "While new forms of power generation are considered, Fawley will continue to play a vital role in balancing supply and demand."CalculatorUtilities: compare and buyUseful sitesOfgemEnergywatchSave on your billsUnravelitUswitch