A new report commissioned by Drax has discovered an energy ‘crunch point’ in 2028 where demand will exceed secure dispatchable baseload capacity by 7.5GW at peak times.
Conducted by business management consultant Public First, the ‘Mind the gap: Exploring Britain’s energy crunch’ report revealed that this is nearly double the shortfall recorded in 2022 (4GW) and represents the tightest headroom for the next five years.
In 2028 the total de-rated capacity will be just 5GW higher, roughly 40% less than the 8.5GW of headroom predicted across 2024 and 2027. This gap could increase even more (50%), continued the report, due to uncertainty around biomass generators which contribute more than 3GW of dispatchable power.
According to the report, this shortfall would be caused by a “perfect storm” of increased demand when more low-carbon technologies are adopted, the retirement of existing assets, and delays in the completion of the 2.5GW Hinkley Point C.
The scale of the crunch
The report outlined that the “scale of the energy crunch” would be decided in the National Grid ESO’s T-4 Capacity Market Auction (CMA) for the delivery year 2027-2028, taking place this week.
A success to mirror that of the T-1 CMA – announced last week – which saw a record amount of capacity secured, is hoped for; however, the report warned that the target capacity that the ESO wishes to procure (44GW) and the amount of generation capacity entered into the auction (43.4GW) is “the tightest it has ever been since the auctions started ten years ago.”
Building new capacity is unlikely to have a “material impact” in time to address the ‘crunch’ Drax continued, so instead, the power generation firm urged the UK government to deliver certainty in the UK’s future generation supply by extending the use of existing baseload generation assets and encourage flexibility and installing more home insulation to help manage demand.
“Delivering energy security is a critical and longstanding challenge for all governments. The need to maintain it while tackling climate change and rapidly decarbonising economies makes the issue all the more acute,” said Richard Gwilliam UK BECCS programme director at Drax.
“This research demonstrates the UK is facing a power generation crunch point, with demand set to outstrip the supply of secure dispatchable and baseload capacity – leaving the UK reliant on intermittent forms of generation. To keep the lights on, part of the solution will be extending the lives of existing generation assets. Drax Power Station and our pumped storage and hydropower sites already provide secure, renewable electricity for millions of homes and businesses – but there’s more we can do.”
