How to keep the lights on – UK gears up for worst-case energy scenarios | Energy industry


He is the man charged with keeping the lights on this winter. A seasoned civil servant, Jonathan Mills was last month named director general for energy supply in the Department for Business, Energy and Industrial Strategy.

In a blog entitled: “What do policymakers do all day?” – a nod to the children’s author Richard Scarry – he set out his approach to working in government earlier this year. “The way that I now think of a policy professional is as an ‘orchestrator’,” he said. Mills, who previously oversaw labor market policy, and before that electricity market reform, now faces the orchestration job of his life.

His appointment reflects the growing concerns over Britain’s energy supplies in the wake of Russia’s invasion of Ukraine. On Monday, Russia is closing Nord Stream 1, its main gas pipeline into Germany. The shutdown has been presented as a planned 10-day maintenance period, but there are fears the pipeline will not reopen, plunging Europe’s largest manufacturing nation into an energy crisis. Although Britain is not reliant on Russian gas, if supply drops, prices will rise even further.

National Grid has pledged to set out its winter plans this month, with the annual exercise brought forward from the autumn in 2020 due to Covid.

Britain’s existing emergency power supply plans are largely designed for outages caused by huge storms or faults in the system rather than supply shortages. But officials are having to confront the possibility of shortages stretching over months. In one “reasonable worst-case scenario”, millions of households could be forced to cut consumption at peak times.

The business secretary, Kwasi Kwarteng, beamed as he sat alongside the tartan-tied Centrica boss, Chris O’Shea, for a photograph last month. The British Gas owner had just signed a deal with Norway’s Equinor for enough gas for 4.5m homes over the next three winters. But O’Shea and Kwarteng now have a different deal to thrash out, over the Rough gas storage site in the North Sea. Centrica shut it down in 2017, but has now submitted an application to reopen it.

One source said any deal would be dependent on price guarantees for Centrica. The government will be keen not to overburden taxpayers with the cost of unpopular fossil fuels. Storage sites typically make money by buying gas on the cheap in summer and selling it at higher prices in winter. However, the unusually high prices this summer have severed that model.

Kwarteng has also been forced to turn to coal. Britain has committed to phasing out the fuel by 2024 but the government has signed deals with EDF and Drax to extend the life of coal units through firms this winter, with the paid a fee and costs levied on consumer bills. Ministers hope to secure a similar deal with Germany’s Uniper to extend the life of its coal operations in Nottinghamshire within weeks.

Boosting nuclear supplies is not as straightforward. In May, France’s EDF said that time had run out for it to ensure it was safe to extend the life of Hinkley Point B in Somerset. One unit was shut down this week and another is due to shut down on 1 August. They provided enough power to supply 1.5m homes. Its sister station, Hinkley Point C, is not expected to come online until 2027 due to construction delays.

As for renewable energy, blustery or bright conditions this winter could boost the contribution from the small but important power source.

The business department held last week talks with manufacturers that use large amounts of energy. Discussions are thought to have assessed current energy usage, changing shift patterns and potential three-hour shutdowns. “The starting point is always to insulate consumers from any disruption,” said one source involved in scenario-planning.

Certain manufacturers are already exempt if shutdowns for three-hour periods cause “significant financial damage”. It is understood steel plants, where coal-fired blastfurnaces run constantly, may be exempt from any future shutdowns.

If all measures to protect consumers from outages have been exhausted, officials may use “brownouts”, in which the electrical voltage is turned down. For households, that means lights may flicker more frequently.

In the direst circumstances, the government can turn to “rota disconnection”. This measure splits the country into power regions which could experience blackouts for three hours at a time with increasing levels of frequency depending on the severity of the shortages. The printed rota looks like a chessboard at first, with a black square for each region on each day and no area shut off simultaneously. By its worst point – “level 18 disconnection”, its doomsday scenario of a national, week-long outage – shows simply an entirely black timetable.

A “protected sites list”, under laws enacted during the 1970s miners strikes, details buildings which are of “national or regional critical need”, protected from closure because of “potential for catastrophic damage to high value plant”. It includes airports, hospitals and water treatment plants. Power stations can use “black starts” – where diesel generators slowly restart the plant – if they are hit by outages.

If a rapid power boost is needed, the fastest source of electricity in the UK is Dinorwig, a picturesque pumped hydroelectric power plant in north Wales. Nicknamed “Electric Mountain”, the secluded lake has six pump-turbine units housed in its main cavern, which can be ramped up from standby to a capacity of 1.32 gigawatts in 12 seconds.

A key question for Mills will be whether to ask households to change their habits. The International Energy Agency said in March that Europeans should turn down their thermostats by 1C to save on gas and reduce dependency on Russian imports.

Under one scheme, trialled by Octopus Energy and endorsed by National Grid, consumers could even be paid to use less energy during peak times. Households could be paid up to £6 a kilowatt hour in credit instead of paying out 28.34pa kilowatt hour. Other options remain on the table, such as encouraging people to wrap up, insulate their homes or even rationing hot water, as the city of Hamburg is considered. With a rummage in his toolbag, Mills has some help to call on, but a few easy choices.

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