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On the verge of an energy crisis

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World Coal,

The UK is on the verge of an energy crisis, according to a new report from energy analyst, Tony Lodge, and published by the Centre for Policy Studies, a think tank, with energy demand set to outstrip dispatchable supply for the first time from early 2016.

Lodge argues that decades of energy policy mismanagement have overseen the shutdown of power plants vital to the UK’s long-term energy security. As a result, the UK’s 52.36 GW of dispatchable energy generation capacity – defined as electricity can be reliably generated, as and when needed – will not cover National Grid’s 2015/2016 Winter Outlook demand forecast of 54.20 GW.

"Britain has lost over 15,400MW (20%) of its dispatchable electricity generating capacity in the last five years as baseload power plants have closed with no equivalent replacement,” said Lodge. “This month National Grid used emergency measures for the first time to call on industry to reduce its power usage in order to avoid shortages.”

The UK has also seen a rise of 131% in electricity bills in real terms over the past 10 yr, according to the report, adding £705 to the average annual household energy bill – easily outstripping any other household essential and hitting the competitiveness of UK industry. This has put 225 000 jobs at risk as businesses consider closure or overseas relocation due to unaffordable production costs.

“The Government should prioritise energy security alongside its environmental commitments,” Lodge concludes. “In the spirit of the Conservative election pledge to enshrine in law not to raise income tax, national insurance or VAT, the Government should also legislate to deliver targets to maintain security of energy supply, diversity and affordability."

In particular, Lodge calls on the government to abandon the UK’s carbon tax, the Carbon Price Floor, before it forces the premature closure of more baseload power plants, to urgently review and revise the measures passed in the previous Coalition government’s Infrastructure Act, which gives the Committee on Climate Change new blocking powers over fossil fuel energy projects, and to introduce an independent annual statement assessing the impacts of energy polity of UK industry, consumers, competitiveness, energy security and diversity.

Lodge also recommends the appointment of an independent Security of Supply System Operator with responsibility for maintaining the resilience and integrity of the electricity grid.

The report – ‘The Great Green Hangover’ – is published as the UK Energy and Climate Change Secretary has committed to ending the use of unabated coal-fired power in the UK by 2025. Coal-fired power remains a key part of the UK’s energy mix, accounting for almost 30% of energy requirements in 2014.

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