Unlike gas, electricity can’t be stored in large quantities. As a result, part of National Grid’s role involves making sure that demand and supply match up. We do this on a minute-by-minute basis. It’s a bit like trying to keep a car at 50mph while driving up and down hills. Balancing is sometimes used for other reasons, too, such as a sudden surge in demand during a televised sporting event, or if a power station suddenly stops generating because of a technical problem.
The energy suppliers who provide electricity to consumers and businesses buy energy from the power stations. The power stations then tell us how much electricity they are going to feed into the network. To balance the network we can request more or less generation in the hour leading up to real-time.
Effectively it’s congestion in the transmission system – like a traffic jam – that prevents surplus power being transmitted to other parts of the country when there isn’t enough demand to use it. This might happen, for instance, if it’s very windy over several days and wind farms are producing much more energy than usual, or if demand is much lower than usual.
We do this to help us manage the constraints of the network when the power being generated is greater than the demand. It’s one of the tools we use to balance the system, and we’ve done this for many years. We do it through the ‘balancing mechanism’ or through direct contracts with power stations.
Great Britain has a free energy market that is open to competition in generation and supply. A balancing mechanism was introduced in 2001 as part of a new trading arrangement, agreed by the Government and the regulator. Each power station makes a ‘bid’ that reflects what they are willing to be paid – or to pay – to be taken off or moved on to the network.
This phrase describes a power source that doesn’t produce a constant amount of energy. The most obvious of this type is energy generated by a wind farm, which will vary according to how windy it is. Sometimes there will be very little wind, and sometimes the wind will be too strong and the turbines will shut down automatically for their own protection.
We have an electricity demand forecasting team, which uses its knowledge and various tools to predict what demand will be.
Backup generation is used day-in, day-out to balance the system, to cover for power station breakdowns, forecasting errors and for unexpected events. In the past we’ve seen periods when the level of electricity generated from wind within the UK, Ireland and parts of Northern Europe has been very low. This can coincide with days of peak electricity demand when it’s cold and still. The cost of using backup generation is part of the total cost of balancing the system.
Around 1 per cent of the average domestic bill goes towards paying the costs for balancing the network every year. In 2012/13, the total cost of balancing the network was £803 million.