Keeping the lights on in the short term — tighter margins and new balancing tools

On the same day as the Department of Energy and Climate Change published its update of the Capacity Market, which is intended to facilitate security of electricity supply from 2018 onwards, Ofgem published its annual Electricity Capacity Assessment Report showing reduced margins in the middle of the decade and an appreciably increased risk of electricity customer disconnections. Ofgem and National Grid also issued consultations on new balancing tools to enable National Grid to manage any supply shortfalls in the period before delivery under the Capacity Market starts to take effect.

Ofgem’s annual report to the Secretary of State assessing the outlook for electricity security of supply makes interesting reading, as the analysis suggests that the risks to electricity security of supply over the next six winters have increased since the last report in October 2012. This is due in particular to deterioration in the supply-side outlook, with the electricity industry having announced the withdrawal of more than 2GW of installed generation capacity in the near future. Further withdrawals are still likely.

Uncertainty around policy and future prices continues to limit investment in conventional generation and no new plant is expected before 2016. There is also uncertainty over projected reductions in demand. Ofgem continues to expect that margins (i.e. the difference between supply and demand) will decrease to potentially historically low levels in the middle of the decade and that the risk of electricity customer disconnections will appreciably increase, albeit from near-zero levels…

If you are registered and logged in to the site, click on the link below to read the rest of the Walker Morris briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Walker Morris

View more briefings from Walker Morris

Analysis from The Lawyer

View more analysis from The Lawyer


Kings Court
12 King Street

Turnover (£m): 42.50
No. of lawyers: 188