The UK National Transmission Service Operator "National Grid" in its published report "Winter Outlook 2014/2015" have raised fears that it will not be able to meet demand through the coming winter months. In its own words "... unexpected issues have introduced uncertainty into the outlook for this winter.
The reasons cited are:
Unexpected events such as fires at Ironbridge and Ferrybridge power stations, partly offset by the return of a unit at Eggborough power station, have had an impact on the volume of plant available for this winter. In addition, Barking power station announced its intention to close, confirming it will not be available for this winter.
The nuclear power stations at Hartlepool and Heysham were shut down for investigations into a fault identified on a boiler unit.
To offset the supply concerns Scottish and Southern Energy have indicated that they hope to have one of the two units damaged by fire at Ferrybridge to be operational in the beginning of November and EdF have confirmed that Hartlepool 1 is returning at the end of November. Once all the damaged units are operational it is anticipated that they will return at approximately 20% reduction of capacity.
National Grid has gone on to state "Some considerable uncertainty remains regarding further plant closures and the maintenance schedule of key generators. As GB System Operator it is prudent we take account of such uncertainty and so, in discussion with Ofgem and DECC, we are procuring New Balancing Services to manage the risk for this winter. These are Demand Side Balancing Reserve (DSBR) to encourage demand side participation in the market and Supplemental Balancing Reserve (SBR) to contract with otherwise uneconomic generation to stay open or return from mothball."
In a likely scenario, moving through the winter and assuming it is an average winter it is probable that the demand will balance supply however National Grid states "In the unlikely event that the amount of generation does not meet the amount of demand for a period of time, there are a number of enduring mitigating actions that National Grid can take. For example the emergency assistance service from interconnectors (power), where we can call upon extra power flows from the continent if available."
Should the winter introduce unanticipated extremes, National Grid is to take the precautionary step of launching an SBR ( Supplemental Balancing Reserve) tender for this winter. A volume requirement was not identified at the time of this tender due to the uncertainties outlined. Instead, any additional volume requirement would be determined as part of the Winter Outlook Report analysis, with SBR contract offered to plant to make up this requirement.
Ofgem responded to the warnings by stating "We are confident that National Grid has the right levers to keep the lights on and maintain a risk of customer disconnections which is better than the reliability standard set by government. However, given the tighter margins there can never be any room for complacency and National Grid and the industry must remain vigilant at all times.
We welcome that National Grid is finalising contracts with power stations to provide extra reserve to help it balance the system if needed. This is a sensible precaution to take account of market developments including uncertainty over power station availability and this is why Ofgem approved new tools to help National Grid manage these lower margins from this winter. National Grid expects these contracts to be in operation for 1st November.
