Electricity system operator National Grid is to tender for two new services to help balance supply and demand in the coming winters. The move follows a call for expressions of interest earlier this year, a consultation on the two services and approval from Ofgem in 2013.
National Grid is currently tendering for up to 330MW Demand Side Balancing Reserve (DSBR) for winter 2014-15; and will tender by autumn 2014 and in early 2015 for a total of up to 1,800MW of both DSBR and Supplemental Balancing Reserve (SBR) for winter 2015-16.
These services will help ensure the country continues to benefit from high levels of system security.
The DSBR is looking to sign up large energy users that have the flexibility to reduce their electricity use – for example by switching to back-up generation – when demand is at its highest between 4pm and 8pm on winter weekdays. This will be in return for a payment, and on a purely voluntary basis.
Such a move will help stimulate a Demand Side Response (DSR) market, which ultimately will help keep energy system costs down for consumers by avoiding the need to build additional power stations to service peak demands.
National Grid already buys similar demand-side services from a range of businesses, and many large businesses already reduce their electricity usage in peak demand periods to reduce their costs.
Supplemental Balancing Reserve (SBR) is targeted at contracting for reserves from generating plant that would otherwise be closed or mothballed. Plant would need to be available on winter weekdays between 6am and 8pm.
The maximum volume needed for the coming winters is set out as follows:
2014-15 – 330MW (DSBR)
2015-16 – 1800MW (DSBR and SBR)
2016-17 – 1300MW
2017-18 – 800MW
Tenders for the winters of 2016-17 and 2017-18 will only be undertaken if an ongoing need for these services is identified and the funding arrangements are extended beyond 2016 by Ofgem.
It is not anticipated that these services will be required in 2018-19 because the government is introducing a capacity market.