Posted: 10 June 2014
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Balancing act

National Grid senior manager Peter Bingham explains the role of the new Balancing Services and how they will help National Grid manage supply and demand.

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Balancing act

Balancing act

Two new tools have been developed to help us meet the challenge of matching supply and demand.

"The decline in available power means tighter margins, between the ability to generate power and demand at peak times, making our role in matching supply and demand more challenging."

Peter Bingham, National Grid senior manager.

Insight:

Both new tools have been developed to improve security of supply and are expected to add less than £1 to an annual domestic electricity bill.

Source: National Grid

National Grid senior manager Peter Bingham explains the role of the new Balancing Services and how they will help National Grid manage supply and demand.

We’re about to tender for two new tools to help us balance electricity supply and demand in the coming winters.

As old coal and oil power stations close, and gas generators are mothballed, the decline in available power means tighter margins, particularly mid-decade, between the ability to generate power and demand at peak times, making our role in matching supply and demand more challenging.

Two new tools have been developed to help us meet that challenge.

This month we’ll be tendering for the first of them – the Demand-side Balancing Reserve service (DSBR). This is targeted at large energy users who are willing to reduce their electricity use – for example by switching to back-up generation – during peak times, between 4pm and 8pm on winter weekdays, in return for a payment.

This scheme will also help stimulate the Demand Side Response (DSR) market, which will make an increasingly important contribution to keeping energy system costs down for consumers by avoiding the need to build additional power stations to service ‘peak’ demands.

Asking users to voluntarily cut usage is also widely regarded as being a more efficient, sustainable and environmentally friendly alternative to building generation solely for the purpose of running at peak times.

Reserve power stations

The second tool, Supplemental Balancing Reserve (SBR), will establish contracts so we have in reserve power stations that would otherwise be closed or mothballed. Plant would need to be available on winter weekdays between 6am and 8pm and would be used in the unlikely event of a shortfall in generating capacity.

We’re initially tendering for up to 330MW DSBR to pilot the new service for this winter, followed by tenders in by Autumn 2014 and in early 2015 for a total of up to 1,800MW of both DSBR and SBR for winter 2015/16.

Both new tools have been developed to improve security of supply – in short, to help keep the country’s lights on with the least impact on energy bills, and are expected to add less than £1 to an annual domestic electricity bill.

Absolute minimum

We currently have a wide range of balancing services in our arsenal – Short Term Operating Reserve, Regulating Reserve, Frequency Response and Fast Reserve to name a few, all used to balance the system on a minute-by-minute basis. The two new services will add to these to help us keep the risk of having to resort to involuntary demand reductions to an absolute minimum.

Both new services will only be used as a last resort, after all other actions available in the market have been exhausted. This is to avoid distorting the existing electricity market and preserve incentives to make generating plant available in the market.

These measures should tide us through to 2018/9, when the Capacity Market being introduced by the Government should lead to the building of sufficient new generation plant to meet the Government’s reliability standards. At that point, these additional tools to balance the network will no longer be needed.

Read more

To register your interest please visit the DSBR Tender Portal or view the DSBR documentation

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