National Grid has called upon demand side providers and power station operators to bid for reserve contracts to help balance the electricity system in winter 2015/16.

The second tender round - which launches today - follows a successful first tender round in December 2014, which secured 700MW of additional reserve. These tender exercises are part of National Grid's approach to managing tighter winter margins during the middle of this decade. 

The contracts from this second tender round will be offered in May 2015 as part of National Grid's two balancing services; Demand Side Balancing Reserve and Supplemental Balancing Reserve.  

For winter 2014/15, National Grid procured extra reserve that added a 1.1GW cushion to the electricity system. The return of generation from outages, good levels of reliability, high levels of renewable output and continental imports, and generally milder weather conditions meant these products were not used beyond testing.  

Cordi O'Hara, National Grid's Director of UK Market Operation, said:

"As most people turn their minds to spring and summer, at National Grid we're already looking at how we manage the power system in winter 2015/16. 

"Although we did not need to use the additional reserve we secured for the winter just gone, contracting additional capacity was a sensible insurance policy to take out, given that margins had tightened. 

"We already know that the margin between supply and demand next winter could tighten further. We want demand side providers and power station operators to come forward and ensure a competitive tender. We're particularly keen to see large energy users come forward to join this voluntary scheme. 

"Our first tender round secured 700MW of additional reserve and this second tender round will help build on this as the outlook for next winter becomes clearer." 


-ENDS-

 Media enquiries to

Mark Malbas
National Grid Media Relations
+44 (0) 1926 655291
mark.malbas@nationalgrid.com
Out of hours duty press officer:
+44 (0) 1926 653000

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 Notes for Editors:   

  1. For more information about Supplemental Balancing Reserve and Demand Side Balancing Reserve, see http://www2.nationalgrid.com/UK/Services/Balancing-services/System-security/Contingency-balancing-reserve/
  2. Ofgem's Electricity Capacity Assessment 2014 set out that margins are expected to tighten in winter 2015/16: https://www.ofgem.gov.uk/publications-and-updates/electricity-capacity-assessment-2014
  3. SBR and DSBR will only be used as a last resort to balance the system in the very unlikely event that there is not sufficient generating capacity available in the market. This would act as a safety net to safeguard consumer interests against the risk of tightening margins. These measures are expected to add less than £1 per year to the average domestic consumer electricity bill.
  4. National Grid has proposed for these services to be available in the mid-decade until the Capacity Market - established in the Energy Act 2013 - takes effect.
  5. National Grid's initial assessment of additional reserve required for the middle of this decade was set out in June 2014: http://www2.nationalgrid.com/Mediacentral/UK-Press-releases/2014/National-Grid-to-contract-for-new-balancing-services/
  6. In December 2014, National Grid announced the results of the first tender round for 2015/16 SBR and DSBR: http://www2.nationalgrid.com/Mediacentral/UK-Press-releases/2014/Additional-electricity-capacity-for-winter-2015/16/
  7. Read National Grid's market update on SBR at  http://www2.nationalgrid.com/UK/Services/Balancing-services/System-security/Contingency-balancing-reserve/
  8. National Grid is one of the largest investor-owned energy companies in the world and has been named Responsible Business of the Year 2014 by Business in the Community. We own and manage the grids that connect people to the energy they need, from whatever the source.  In Britain and the north-eastern states of the US we run systems that deliver gas and electricity to millions of people, businesses and communities. In Britain, we run the gas and electricity systems that our society is built on, delivering gas and electricity across the country.  In the North Eastern US, we connect more than seven million gas and electric customers to vital energy sources, essential for our modern lifestyles.
  9. National Grid in the UK: 

We own the high-voltage electricity transmission network in England and Wales, operating it across Great Britain

We own and operate the high pressure gas transmission system in Britain

Our gas distribution business delivers gas to 10.9 million homes and businesses

We also own a number of related businesses including LNG importation, land remediation and metering

National Grid manages the National Gas Emergency Service free phone line on behalf of the industry - 0800 111 999 (all calls are recorded and may be monitored).

Our portfolio of other businesses is mainly concerned with infrastructure provision and related services where we can exploit our core skills and assets to create value. These businesses operate in areas such as Metering, Grain LNG Import, Interconnectors and Property. National Grid Carbon Ltd is a wholly owned subsidiary of National Grid. It undertakes Carbon Capture Storage related activities on behalf of National Grid.

Find out more about the energy challenge and how National Grid is helping find solutions to some of the challenges we face atwww.nationalgridconnecting.com

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