The risk of power cuts in the UK, for a variety of reasons, remains real. Low plant margins (i.e. limited spare capacity at peak demand levels) in the UK are obvious enough. However, the events of 28 April 2025 ‒ when Spain, Portugal and parts of France were plunged into lengthy power outages ‒ were very disconcerting. A recent Spanish government report has now placed much of the blame on the national system operator, the Redeia-owned Red Electrica. There was some criticism, too, of unnamed private sector generators in causing grid instability.
Redeia’s UK counterparty, National Energy System Operator (NESO), will have been following these developments particularly closely. With more renewable generation on a system that was originally built around coal-fired plant – and therefore generally sited close to coalfields – maintaining grid stability has become immensely complex, and it remains a major challenge for NESO.
In fact, widespread and lengthy power cuts can be caused by a range of factors. Bad weather can create havoc with rural transmission systems, as has been seen in recent years in rural parts of Scotland. Furthermore, the sudden unavailability of expected capacity – witness the Hornsea 1/Little Barford near simultaneous outages in August 2019 – may create grid instability and curtail power transmission as a consequence.
For many years, the UK’s plant margin has been worrying low, although imports via interconnectors, especially from France, provide added capacity. NESO’s latest winter outlook report for 2025/26 indicates confidence that sufficient power will be available this winter. However, in early December and mid-January, some electricity imports, via the French interconnector, may be required. Supply risks, though, remain.
Nevertheless, the forthcoming closures of all major UK nuclear plants, Sizewell B excepted, can only worsen this scenario. On the renewables front, many new offshore wind plants are planned, but the decision of Orsted (a leading Danish offshore wind developer) not to proceed with its Hornsea 4 project is a serious sector concern; mainly attributable to offshore wind costs having risen sharply of late.
Looking to the long term, the government has recently announced new nuclear-build initiatives. Sizewell C is the key project, which is predicated on the Hinkley Point C template – but without the extensive delays and heavy cost overruns. However, financing its build, probably through the Regulatory Asset Base (RAB) model, will be very challenging.
The winner of the government’s Small Modular Reactor (SMR) nuclear plant competition has been announced. Not surprisingly, Rolls Royce’s persuasive case has prevailed, and it is planning to build three 470MW SMR plants in the UK. In securing its coveted preferred-supplier status, Rolls Royce saw off competition from such legendary names as General Electric and Westinghouse, inter alia.
