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Dampened demand forecast over bank holiday as grid balancing costs soar

Image: National Grid.

Image: National Grid.

Over the bank holiday weekend, the UK's electricity demand is set to drop to an all-time low of just 13.8GW while the cost of balancing soars.

On Saturday, demand is set to have a low of 14GW overnight, rising to a low of just 15.6GW during the day. On Sunday night, this is set to fall even lower to just 13.8GW overnight, with a low of 16.7GW during the day, according a webinar presented by National Grid ESO this week.

As the operator works to balance these low levels of demand, prices in the Balancing Services Use of System (BSUoS) mechanism have skyrocketed, with half a billion of additional balancing costs caused by COVID-19.

During the coronavirus lockdown, the country’s electricity demand has been around 20% lower than average, and this is further exacerbated over bank holidays.

The Easter weekend saw consistently low demand, and on Saturday 11 April, energy demand fell to just 24.36GW, a new record. This beat the previous level set on 7 August 2016 of 24.7GW.

Similarly, over the most recent May bank holiday demand dipped dramatically, meaning National Grid had to implement new measures to counteract the drop. This included its new Downward Flexibility Management service, which reduced embedded generation.

National Grid ESO has also announced a deal with EDF to reduce the output of its Sizewell B nuclear power station. This saw the operator take a different approach to the usual daily payments made via the Balancing Mechanism, signing a one off fixed contract to reduce the output instead.

Additionally, an urgent grid code modification was brought in on 7 May, which clarified the operators ability to disconnect embedded generation in emergency events, as a precaution before the bank holiday.

On Tuesday, National Grid ESO further developed its ability to balance the grid during these unprecedented times with the Power Available (PA) project.

It has now integrated the PA signal from over 90 renewable generators into its control systems and processes. This will give the ESO’s control room engineers greater visibility of assets such as wind farms, helping them to balance the system on a second by second basis.

The ESO added that innovations such as this are making the electricity system “smarter, more flexible, and – since wind power is often a cost-effective option when it to comes to real time frequency response – delivers increased value to consumers".

While these measures have seemingly proved a success thus far, with the operator able to avoid any blackouts despite the challenges associated with such a dramatic drop in demand, these measures are not without cost. During the summer period 2019, which covers May through to August, the cost of BSUoS charges were £333.2m. This year this is expected to jump ~£500 million because of the impact of COVID-19.

Already, SSE Generation has put in a request to National Grid ESO to defer the additional BSUoS, spreading them across equally across all the settlement periods during 2021/22 to allow suppliers and generators managed the unprecedented charges.

Over the coming weekend, National Grid ESO will have to once again call on these measures, in particular the Downward Flexibility Management service.

Amy Weltevreden, structuring and optimisation manager at the ESO said that it has “seen a great take-up so far”. There is over 2.4GW of capacity from 170 smaller generators signed up to respond, including 1.5GW of wind, 700MW of solar and almost 100MW of demand turn-up.

“If we’re anticipating the wind blowing at a given time when we’re also expecting low demand, we’re now able to instruct these smaller scale distributed generators to reduce output to help balance the system,” explained Weltevreden. “As with any actions we take to balance the electricity system, they’re carried out in economic order, with cheaper actions taken first, to ensure we operate the system as efficiently as possible for consumers.”

One of the most recent efforts to help manage the low demand has been a pathfinder for new contracts for reactive power in the Mersey region. Today, National Grid ESO announced it had awarded contracts to commercial providers PeakGen and Zenobe, for equipment and battery storage respectively as part of this.

Together these represent £8.67 million of contracts over the nine-year term starting in April 2022.

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