Grid To Pay Firms To Prevent Winter Blackouts

National Grid has begun offering to pay firms to manage their electricity use from this winter to help prevent the "lights going out".

The company, which runs the power network in England and Wales, is asking the largest energy users to agree to cut their usage at peak times over the next four winters.

But the move was seized upon by a body representing big industry as proof that its earlier warnings to successive governments on a lack of spare capacity risked harming consumers and businesses.

National Grid said any requests to reduce power consumption would apply between 4pm and 8pm on winter weekdays and would add no more than £1 annually to the average household energy bill.

The Demand Side Balancing Reserve service (DSBR), as the scheme is being called, would only be enacted on a voluntary basis, the company insisted.

Industry groups argue too much focus has been placed on renewable energy

National Grid was also looking, from winter 2015/16,  to boost capacity from electricity generators that would otherwise be closed or mothballed between the hours of 6am and 8pm on winter weekdays.

Both initiatives followed a consultation exercise on the best way to tackle the growing threat of blackouts.

Worries about power shortfalls have grown in recent years following the closure of many old generators under European emissions rules.

Threats of oil and gas supply disruptions remain a concern given limited storage space while energy firms have warned their levels of infrastructure investment are unclear in an environment of hostility towards rising household bills.

It was anticipated, the power operator said, that both its initiatives would not be required in 2018/19 because the Government was introducing reforms to ensure sufficient capacity was available to meet future demand.

National Grid's Peter Bingham said: "It's our job as electricity system operator to make sure we've got all the right tools at our disposal to balance supply and demand on the electricity network, 24 hours a day, 365 days a year.

"For winter 2014/15 we are inviting providers of demand side response services to offer a small volume of demand reduction capability to pilot the new DSBR service.

"For winter 2015/16, we will tender for both services. This offers generators an incentive to make their power stations available in winter where they might otherwise be unavailable."

The Energy Intensive Users Group (EIUG), which represents major industry, said the measures were avoidable.

Its statement said: "EIUG has warned for many years, the reason we are facing this situation is because of the flawed energy policy followed by successive governments, overly focused on costly intermittent renewables like wind and solar, which are inherently incapable of providing secure electricity supplies.

"The government has belatedly realised the urgent need to enable investment in secure generating capacity from nuclear and gas-fired power stations, but past mistakes mean this investment will arrive later than needed, leaving consumers at unacceptable risk of price spikes and blackouts, and jeopardising the investment in manufacturing industries needed to continue the economy recovery."

The Energy Secretary Ed Davey told Sky News the measures were an environmentally-friendly way of ensuring energy security.

He said: "It's a much cheaper way than building power stations. This is a process which is used at the moment in Britain ... so this is a tried and tested approach.

"It's voluntary, it's very cost- effective and it's green", he insisted.

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