Scariest Power Risk: Blackout Britain

The Scream, by Edvard Munch (1893)As aging power plants are closed, the margin of generating capacity in the UK over demand, which used to be over 30% before the industry was privatized in the early 1990s, could fall to as little as 5% by 2018. As a rule of thumb, 20% is generally considered to be an appropriate margin. The investment required to replace this lost capacity with new plants, mainly nuclear and renewables, is thought to be around £200bn, but with no end in sight for the current economic woes, will banks and other investors be ready or able to stump up such a huge amount – especially as the problem of aging power stations is not limited to the UK, and other countries will also be trying to attract investment? And has any nuclear power station ever been built on time and within budget? Now that’s something to keep you awake at night!

This post was part of the special feature about Our Scariest Risks, published October 31, 2011. The feature also included these other risks:
Aerospace
Captive Insurance
China
D&O
Employee Benefits
Energy
Environmental Liability
ERM
Financial Services
FINEX
Global
Health Care
Middle East
Mining
Power
Real Estate
Reinsurance
Renewables
Supply Chain
Terrorism
Trade Credit

About David Reynolds

David is an Executive Director in Willis' Global Markets International in London, where he advises large national a…
Categories: Power & Utilities | Tags:

Leave a Reply

Your email address will not be published. Required fields are marked *