On Tuesday, faced with a combination of cold weather, high demand, uncertainty over electricity imports and low renewables output, National Grid resorted to coal generation for the first time this winter. The 60-year-old West Burton A power station was fired up. From the perspective of those people antipathetic to renewable energy, it was evidence that when the going gets tough, fossil fuels have to come to the rescue.

In socioeconomic theory, there is a trade-off between the amount of money that’s spent to limit supply interruptions of an essential good, on the one hand, and the cost of those interruptions on the other. If interruptions occur frequently, more money should perhaps be spent to reduce their number. Conversely, though, if interruptions never occur, that might indicate that the supply network has been over-engineered or ‘gold-plated’. The optimal point of investment occurs when the marginal cost of reinforcement equals the marginal benefit in the form of reduced costs from interruptions, taking all costs into account. All costs should include ‘externalities’ such as (in this case) the social cost of greenhouse gas emissions. These externalities might be expensive, but a complete absence of any interruptions or shortages is suggestive of over-engineering.

The electricity industry defines Value of Lost Load, or “VOLL”, as the theoretical unit cost of involuntary demand curtailment, the overall economic value that users attribute to security of electricity supply. VOLL is notoriously difficult to quantify. Various studies over decades have estimated it to be several thousands of pounds per MWh, with a wide range between them; and, for a given study, a wide range between types of customer. A study for Ofgem in 2020 came up with a value of £17,500 per MWh for domestic consumers, which equates to £17.50 per kWh. A kWh is roughly the amount of energy used by a typical domestic oven, or kettle, in twenty minutes.

The concept of ‘peak lopping’ or reducing the highest levels of demand – voluntarily or involuntarily, with different associated costs – applies to a broad range of activities; and is likely to be increasingly important in the green revolution. The owner of a domestic heat pump may save money overall by purchasing one that does not quite meet household demand on the very coldest days of the year, choosing to ‘top up’ with a portable heater and/or dressing more warmly on those days. The owner of an electric vehicle may deliberately choose one that does not have the range necessary to travel to the in-laws in northern Scotland, and be prepared to hire a petrol car or go by train for the occasional visit. It might be cheaper for a business to suffer a small percentage of days with connectivity problems than to pay for rock-solid broadband provision.

We could, in principle, build so much renewable and storage capacity (including batteries and hydrogen storage) that we have an entirely green electricity system which is unlikely to experience even a single shortage in a given year. But VOLL notwithstanding it might be cheaper – and better for the environment – to have less capacity and learn how to cope with the occasional shortage.

It looks pretty certain that we will face more extreme weather due to climate change; and there will be an increased need for adaptation. The occasional day when old and polluting power capacity has to be called into action does not constitute evidence for abandoning renewable energy targets. It may, though, highlight the rising importance of flexibility at short notice in our economic activity and way of life.