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Safe and secure supply forecast in National Grid ESO's Summer Outlook despite 'challenging' low demand

National Grid ESO has said it has the tools to manage any operational challenges. Image: National Grid ESO

National Grid ESO has said it has the tools to manage any operational challenges. Image: National Grid ESO

There is sufficient capacity and operational tools to maintain security of supply over for the summer period, National Grid ESO has said, with low demand to remain challenging.

In its Summer Outlook 2022, the ESO outlined how peak demand and reserve requirement is expected to be met at all times without relying on imports from Europe.

Electricity demand and operational management is expected to be very similar to summer 2021, with the ESO managing low rather than high demand. Electricity prices are also expected to continue to be high across the season.

While the weather corrected minimum transmission system demand usually occurs during the high summer period, this year the forecast impact of the extended Platinum Jubilee bank holiday in early June has moved this forward, with it now expected to fall over that weekend.

The ESO said that while the low demand expected to occur over this period has the potential to present an operability challenge, it doesn’t currently expect this due to generator outages over the period.

However, if unusual weather occurs over the weekend, it said it does have the tools to manage any operability challenges that may arise.

Fintan Slye, director of the ESO, said that in relation to the summer period, “managing minimum demand is likely to continue to be more challenging than has historically been the case”.

“We don't expect demand to be as suppressed as in 2020, but demand at transmission level continues to fall as more embedded generation connects at distribution level voltages and energy efficiency measures are taken forward.”

The minimum demand of 17.1GW is predicted to be marginally lower (0.1GW) than last summer, while summer peak demand of 32.8GW is to be slightly higher than 2021, when it was 32.5GW, and 2020 when it was 31.5GW.

In 2020, the minimum demand meanwhile was 16.2GW, with the 8 May bank holiday sparking operational concerns, although security of supply was maintained on the day. It led to the creation of the Optional Downward Flexibility Management (ODFM) service, which offers small scale renewable generators commercial agreements to reduce their output.

ODFM was retained during summer 2021, while the 3 May bank holiday of that year saw wind generation break records.

The ESO’s analysis for 2022, however, has found that due to generation closures the ODFM service will not be required, and as such is not to be offered.

The ESO did highlight how it is introducing new stability and pre-fault frequency services this summer – such as Dynamic Regulation, which launched earlier this month, and Dynamic Moderation – to help better manage the system and reduce consumer costs.

UK forward electricity prices for summer 2022 are considerably higher than those for 2021, with the summer 2022 contract closing at around £250/MWh compared to around £55/MWh for last summer.

Electricity prices were already expected to be high this summer due to the high gas prices which have persisted from last winter. While higher than last year, these forward prices did fall from their highest values to between £150-£200/MWh, however the situation in Ukraine and the pressure it has put on global energy markets has caused this to rise again.

The ESO said this doesn’t impact on GB security of supply of electricity, but it does increase the cost of balancing. While it has taken measures to reduce the actions required and therefore the cost to consumers, the ESO said the high energy prices will result in an increase in operability costs.

National Grid ESO has also been conducting a review of the balancing market and some of the high-cost days that took place over last winter. It is currently finalising this review and is to publish its initial conclusions in the coming weeks.

It also confirmed in its Summer Outlook that an early view of the Winter Outlook is to be published in July.


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