28/06/2013 03:22 BST

Power Blackout In Britain: Ofgem Warns Against Depleting Electricity Supplies

File photo dated 09/12/08 of electricity pylons near Edinburgh as the danger of power shortages in the UK by the middle of the decade has increased, regulator Ofgem has warned.

The UK could face power-blackouts by 2015, unless the industry combats depleting electricity supplies effectively, a regulator has warned.

As Ofgem highlighted uncertainty around supply and demand for electricity, the Department of Energy and Climate Change was forced to calm worries that power could be rationed and businesses compelled to switch off.

The regulator said it has been working with Decc and National Grid to explore options that would provide consumers with additional safeguards against the increased risk to mid-decade security of supply.

All three organisations agreed that it was "prudent" to consider the case for extra measures to help National Grid balance the electricity network during the middle of the decade when capacity margins could be tight.

Ofgem said: "The report shows that electricity supplies are set to tighten faster than previously expected in the middle of this decade.

"The risk to electricity supplies is projected to increase from the current near zero levels, although Ofgem does not consider disruption to supplies is imminent or likely, providing the industry manages the problem effectively."

It said National Grid's projections on power demand varied greatly depending on assumptions on economic activity and energy efficiency, and there was also uncertainty over the timing and scale of plant closures and mothballing.

Ofgem chief executive Andrew Wright said: "Ofgem's latest report on electricity security of supply highlights the need for reform to encourage investment in generation.

"This is why Ofgem welcomes Decc's commitment to introduce a capacity market that will provide a longer term solution to this problem at a time when Britain's energy industry is facing an unprecedented challenge to secure supplies.

"Ofgem's analysis indicates a faster than anticipated tightening of electricity margins toward the middle of this decade.

Ofgem, together with Decc and National Grid, think it is prudent to consider giving National Grid additional tools now to procure electricity supplies to protect consumers as the margin between available supply and demand tightens in the mid-decade."

Ofgem's Project Discovery report in 2009 first identified the issue of tightening capacity margins in the middle of the decade, finding that Britain's energy industry faces an unprecedented challenge to secure supplies to consumers due to the global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations.

Energy Minister Michael Fallon told BBC 2's Newsnight: "I can assure you the lights are not going to go out."

He said: "The latest assessment has shown that the position is slightly worse than the previous assessment last year and they have got to make sure, the regulator Ofgem, has got to make sure, with all the tools at its disposal, bringing some mothball plants back in action, it has got to make sure that the lights stay on and they will."

A Department of Energy and Climate Change spokesman added: "If necessary, steps such as bringing mothballed plant back online will ensure we have enough power in the short term. Power is not going to be rationed and businesses are not going to be forced to switch off.

"A capacity market will ensure we have enough power in the longer term."