National Grid has disputed figures that suggest the UK will face a significant power capacity shortfall next winter. However, it underlined the need to scale demand response as more generating plant comes off the system.
Facing questions from the Energy and Climate Change Committee, the system operator reiterated that winter margins would get tighter but expressed faith in its ability to prevent blackouts.
Director Cordi O’Hara admitted that no system operator could give guarantees of 100% system reliability. However, she said that National Grid had procured the right “insurance policy” to meet the government-set security of supply standard of three hours loss of load.
National Grid faced questions about potential system failures following the Notice of Insufficient Supply Margin (NISM) issued earlier this month. That tool led the market to respond and ensure no disruption to supplies. NISMs are the first in a set of tools the system operator is mandated to use before asking distribution networks to turn off customers should everything else fail.
O’Hara said Grid’s own models suggest that between 7-10 further NISMs may occur over winter, but that other variables could lead to more or fewer market alerts.
“No system operator in the world will give you 100% guarantee [against blackouts],” said O’Hara. “I can assure that we have done extensive and robust analysis overseen by an independent regulator [Ofgem]. The standard is set by government and we were well within that standard at 1.1 hours loss of load.”
Head of commercial operations Duncan Burt said the transmission network itself was “99.999% reliable” while Ro Quinn, head of energy strategy and policy, said that even scenarios such as the winter of 1963 and the hurricane of 1987 were “baked in” to National Grid’s scenario planning.
National Grid disputed a question from Conservative MP James Heappey about a Centre for Policy Research analysis that suggests a capacity shortfall of several gigawatts next winter due to retiring thermal plant.
Burt said that analysis did not take into account “at least several gigawatts” of embedded generation – or generation connected to the distribution network – that would help to counteract retiring plant.
Quinn added National Grid was aware of “suggested [thermal plant] closures of the order of around 4-5GW … But some are still making final decisions as to whether or not they will close, so it is too early to confirm what that answer will be”.
More demand side response
Regardless of plant closures, O’Hara said National Grid was “taking early action” to ensure sufficient balancing reserve is procured for next winter, where Grid’s own figures have suggested there will be a margin of virtually nothing.
Heappey suggested that would make system balancing next year increasingly difficult.
O’Hara admitted that balancing the system was “always difficult [hence] we must make sure we have access to the right balancing services, and that is why we have taken early action.”
She added that National Grid will “need to buy at least what we bought this winter,” reiterating that National Grid was currently tendering for more balancing services. The tender closes 30 November.
Gaming the system?
Questioned about system gaming, in light of reports that suggest some generators may be taking advantage of capacity shortfalls to make windfall gains, National Grid said it was Ofgem’s job to investigate any such activity and take action if appropriate.
Asked about UK winter gas supplies, Quinn responded that the UK may have to call on gas storage for “one or two” evening peaks, but that “we are confident this winter” that the UK would not fall short of gas.
Watch the session here.