National Grid looks to conclude supply agreements to ensure winter capacity
MIDLANDS utility National Grid has said it is urgently concluding supply contracts with three power stations to ensure electricity surpluses can be maintained this winter.
In its 2014/15 Winter Outlook, National Grid confirmed what many industry observers had feared, namely that electricity supply margins are currently at their lowest level for some time.
In a statement accompanying the outlook, the utility said: “This year electricity margins have decreased compared to recent years, with the average cold spell (ACS) margin expected to be 4.1%. This is due to planned generator closures, breakdowns and new plant not coming online as quickly to replace them.
“In response, National Grid is finalising contracts with three power stations to provide additional reserve under Supplemental Balancing Reserve (SBR); these are Littlebrook, Rye House CCGT and Peterhead CCGT.”
The utility said that together with the Demand Side Balancing Reserve (DSBR) it had already contracted, these would agreements would provide an additional 1.1 GW of de-rated capacity, increasing the de-rated margin from 4.1% to 6.1%.
Cordi O’Hara, Director of Market Operation for National Grid, said: “The Winter Outlook Report provides the energy market with a snapshot of the potential gas and electricity picture for the coming winter.
“Our analysis shows gas supplies to be in a strong position. Supply sources are diverse, network capacity is healthy and gas storage is well stocked.
“The electricity margin has decreased compared to recent years, but the outlook remains manageable and well within the reliability standard set by Government.”
The outlook report has been produced by National Grid in its role as electricity System Operator and as owner and operator of gas transmission infrastructure in the UK.
The outlook follows consultation with the energy industry, analysts, academics and energy policy experts.
So far as gas supplies are concerned, the company said it was in a strong position this winter, with gas supplies, storage and network capacity well in excess of maximum expected demand.
“As System Operator, we have taken the sensible precaution to secure additional tools to bolster our response to tighter margins.
“We will continue to keep a close watching brief across both electricity and gas throughout the winter so that we’re strongly placed to respond to any unanticipated events,” added O’Hara.
