Over the past few years with power station closures the margin between the predicted peak demand from consumers and the total available generation has been continuing to narrow. over the past two winters we have been very fortunate with very mild conditions which haven't driven the peak demand as high as was predicted.
At a press briefing, Cordi O’Hara, Director of Market Operation at National Grid has warned that this winter the margin is predicted at 1.2%. This is around 10% of what National Grid would have had available just a decade ago and is uncomfortably tight. Cordi said “Electricity margins are continuing to narrow.”
Through the new services that they have developed to address this issue they expect to be paying an extra £36m to providers of SBR and DSBR, which are designed to keep older power stations in a state of readiness when its looking tight or pay large consumers to reduce load to take pressure off of the system.
She said National Grid has 2.6GW worth of capacity on standby for emergencies following the tenders.
Ms O’Hara went on: “We’ve bought a whole host of power stations to hold in reserve and we’ve also bought a whole load of contracts with businesses to change their energy consumption and after that we’ve achieved a margin of 5.1%.”