Innovative Energy Consultancy Ltd
Innovative Energy Consultancy Ltd

Supply security takes centre stage

The system operator National Grid has taken steps towards ensuring the security of the GB’s electricity supplies for the coming winter.  The company announced on 3 June that it had secured an additional 2.56GW of electricity reserve for winter 2015-16, in order to help ‘keep the lights on’ in the UK.

The announcement followed the conclusion of the second tender round for the 2015-16 Supplemental Balancing Reserve and Demand Side Balancing Reserve.  The government has given National Grid these two mechanisms to help it to manage supply and demand over the coming years.

The second round saw National Grid buy almost 1.9GW of additional reserve, further to the 665MW secured in the first round in December 2014.

It was estimated that this reserve capacity would, overall, cost £36.5mn, comparing favourably to the £31.3mn paid for the additional 1.1GW procured for winter 2014/15.

Among the highlights of the second tender round was a significant growth in the market for demand side balancing – organisations able to voluntarily reduce demand when called on – with up to 177MW of capacity to come from businesses signed up to the scheme.

National Grid said the auction had provided ‘early certainty for generators, value for money for bill-payers and record levels of demand side response (DSR)’. The Government is exploring the role that DSR can play in easing supply concerns, saying it would open the 2nd phase of the Electricity Demand Reduction pilot.

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