Energy Bill Rise To Avert Threat Of Power Cuts

Householders face higher energy bills under moves to combat the threat of blackouts this winter.

The closure of some powers stations would have left spare capacity in the system of just 1.2%, increasing the risk of power cuts and the lights going out this winter.

To secure extra supplies, National Grid (LSE: NG.L - news) has paid out £36m to put a number of plants on standby and ask some industries to switch off power.

While increasing spare capacity to around 5%, the cost of measures will add around 50p to the average household bill.

Cordi O'Hara, National Grid's director of market operation, said: "It's clear that electricity margins for that coldest, darkest half hour of winter are currently tighter than they have been, due to power station closures.

"As system operator, we feel we've taken a sensible precaution again this winter to buy some extra services.

"Together with the tools we already use to balance the network these additional services will significantly increase the energy reserve available this winter."

Energy Minister Andrea Leadsom said: "Our priority is to ensure that British families and business have access to secure affordable energy supplies they can rely on.

"National Grid have confirmed that our plan to power the economy is working - and it means that the lights will stay on this winter as well as making sure our homes and businesses have the gas and electricity they need in the future."

The country is faced with falling energy capacity because EU rules have forced older plants to shut, while low wholesale power prices have made some uneconomic to keep open.