UK generating capacity margins are set to reduce from 14% today to 4% by the winter of 2015-16 as polluting power stations close under EU air quality rules, energy regulator Ofgem said October 5. The analysis, published for the Department of Energy and Climate Change, reinforces the need for urgent electricity market reform to bring forward new investment, Ofgem said. Capacity is set to shrink over the next four years as coal-and oil-fired power stations that opted out of the Large Combustion Plant Directive close. Cheap coal and the looming threat of new carbon price floor-related charges for generators in the UK from April 2013 have seen coal-fired plants rush through their hours. High oil prices meanwhile have taken ageing oil-fired capacity out of the market, even for peak hours.
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