National Grid recently made clear its intentions to import more electricity from Europe as part of new measures to maintain Britain’s power supply and reduce consumer energy bills.
The company said that British consumers would stand to save £1 billion annually as a result of buying cheaper electricity from power stations in continental Europe. National Grid also warned that electricity prices in Britain would remain higher than elsewhere in Europe, where heavy investment in renewables such as solar and wind is continuing to bring prices down.
Energy secretary, Ed Davey, Ofgem, and several energy companies have backed proposals to boost the number of interconnectors, which supply Britain with electricity from the continent.
National Grid revealed in August that it will peruse emergency measures to fend off a full blown energy crisis in the coming two years. This is a result of extremely low energy reserves, estimated to be as low as 2 percent.
The group is also promoting new incentives to big businesses to turn off machinery and lights at peak hours in order to help ease the strain on the network. These measures are entirely optional but National Grid hopes they will go some way to helping alleviate the looming energy crisis.
The government is offering incentives to customers to lower their energy usage as a cheaper alternative to building new power plants. Ministers believe that such measures have the potential to save energy equivalent to that produced by 22 power stations by 2020.
Chief executive of National Grid, Steve Holiday, said that these incentives will become increasingly important as new solar and wind farms are brought on line, to cover the natural lulls in renewable energy production. He added “It is the world we are beginning to move into”.
The first subsidies offered to energy companies will be held in December by capacity auction. Energy companies that participate must agree to build new power stations or use their own incentives to save an amount of energy equivalent to that which a power station would generate. These new subsidies are intended to replace the emergency reserve set up by National Grid.
The chief strategy officer of Flextricity, Alistair Martin said that due to the complex structure of the proposed scheme, it is more likely that the big six power companies will opt to build more power stations, despite it being the more expensive option.
“The Big Six’s business models mean that it’s hard for them to get involved in energy consumers’ habits. The details of the scheme have come out more their way than the consumers’ way,” he said.
Chief executive of OfGem, Dermot Nolan said: “The Department of Energy has gone through endless amounts of pain to make sure it works smoothly. But the proof is in the pudding.”