UPDATE 1-Britain brings forward electricity supply auction to avoid shortages

(Corrects date of auction in paragraph 4 to Sept. 1-July 31, not Sept. 1)

By Oleg Vukmanovic

May 6 (Reuters) - Britain is bringing forward a scheme to encourage power companies to supply electricity at peak times by a year in a bid to avert a looming supply crunch and prevent price spikes, the government said on Friday.

The country faces the risk of electricity supply shortages over the next few winters as coal plants close due to weak economic conditions and investors say there is little incentive to build new power plants.

Under the government's capacity market scheme, the owners of power plants are paid to provide electricity at short notice.

Power capacity auctions will take place between Sept. 1, 2016 and July 31, 2017 to secure back-up supply for winter 2017/2018, a National Grid (LSE: NG.L - news) spokesman said.

The move is part of plans to make Britain's energy infrastructure fit for the 21st Century and ease the risk of price spikes caused by unusually cold days, it said.

A consultation to reform the capacity market rollout was launched in March with those measures now confirmed, which include buying more electricity earlier and toughening sanctions against firms that break their commitments to the scheme. (Reporting by Oleg Vukmanovic in Milan; Editing by David Goodman and Mark Potter)