Winter electricity blackouts risk recedes, says National Grid

LONDON - The risk of electricity blackouts in Britain this winter has diminished, after the National Grid and the government spent more than £140m on tools designed to guarantee the lights stay on.
The Grid’s capacity margin, the cushion between electricity demand and supply, has risen to 6.6, beating its summer prediction of 5.5. The buffer zone is also well ahead of last year’s “tight but manageable” 5.1, which was the lowest in a decade.In its annual winter outlook, the firm that operates the UK’s electricity transmission network said it expects average peak demand of 52.7GW during cold weather, with 55GW of supply capacity available.The improved position is partly down to a reprieve for the Eggborough coal power plant in North Yorkshire, which was due to shut down before the winter but will stay partly operational until March 2017.The margin was also boosted by a breakdown in the UK’s electricity interconnector with Ireland, which usually results in more electricity flowing out than in. “Since publishing the provisional winter margin in July, additional electricity generation has been made available to the market,” said Phil Sheppard, the Grid’s director of system operations. “This has had a positive impact on the outlook for winter, increasing the margin between potential supply and demand.”While the extra availability of power from Eggborough made blackouts less likely, the Grid also bought tools designed to ensure the lights won’t go out. The UK’s electricity system operator spent £122m on supplemental balancing reserve contracts, which pay power plants to be on standby in case of outages elsewhere or a sudden surge in demand.These included £77m of payments to the Eggborough and Fiddler’s Ferry power plants and will add about £1.80 to the average annual bill.The Grid said it expected to have to activate these contracts at some point this winter, meaning the plants would be put on standby and could be asked to generate electricity. This is most likely to happen during the week beginning 9 January, when the weather is likely to be cold and several power plants have planned outages scheduled.The government has also spent about £22m on 0.8GW demand-side response contracts, where firms agree to reduce or shift their power usage, according to an estimate from the Energy & Climate Intelligence Unit ECIU thinktank.Without these measures, the Grid said the capacity margin would have been just 1.1. “The increased cushion between supply and demand in this year’s winter outlook shows that power cuts are exceedingly unlikely,” said Dr Jonathan Marshall, energy analyst at the ECIU.“A boost on last year – when there were no issues in the system – shows that the UK continues to have a reliable electricity system as we go through this period of transition.While the costs are slightly higher this year, they account for just 0.3 of the average electricity bill, an unavoidable cost as the UK faces up to the task of replacing huge amounts of ageing infrastructure over the next decade.”This winter is the last before reform of the electricity market ushers in a completely different system of power supply designed to render such tools unnecessary.Britain will also be “well supplied” with gas for heating, the Grid said.