Electricity margins could be ‘tight’ this winter, grid firm says

The Electricity System Operator said it should be able to keep the lights on, despite narrow margins at the end of the year.

27 July 2022

Britain’s electricity supply might be tight at times this winter, the body that is tasked with balancing the grid has said.

The Electricity System Operator (ESO) forecast that margins might narrow significantly towards the very end of the year, but it believes it should be able to keep the lights on.

“Our operational modelling indicates that there could be some tight periods this winter, which are most likely to occur in the first half of December,” it said in a report issued ahead of winter.

The grid needs to make sure that it has enough electricity generators ready to go when demand for electricity peaks.

It means that it needs to maintain a margin above the forecasted demand to deal with any short spikes.

If the margin falls below certain levels the ESO will send out a so-called Electricity Margin Notice (EMN). This lets generators know that more electricity is needed.

The ESO said that it might need to use the EMNs this winter to ensure supply is stable.

“We may need to use our standard operational tools to manage these periods should they occur which, for example, may mean issuing EMNs,” it said.

“We expect there to be sufficient available capacity to respond to these market signals to meet consumer demand.”

In the report it notes that Britain is not as reliant on Russian gas as other countries in Europe.

But “it is clear that the cessation of flows of gas into Europe could have knock-on impacts, including very high prices,” the report said.

The ESO has worked with the Government to ensure that four coal power stations are still ready to use if they need to be called on this winter – they are working on a fifth.

It is also “exploring options” to incentivise energy users to reduce their use during peak times.

The model that the ESO uses implies that Britain should be able to keep the lights on during the winter.

But it is likely to be a troubled winter. Currently the Nord Stream 1 pipeline that brings Russian gas to Europe is only running at 20% of its maximum capacity.

Russian flows to Europe have been reduced since the country launched a full-scale invasion of Ukraine in February.

It has led some to worry about whether there will be enough gas to go around this winter. Much of the UK’s electricity comes from gas, so any serious hit to gas supplies could impact the availability of electricity.

The ESO’s model, however, assumes “normal market conditions” and that there is no disruption of fuel supplies to power stations and that the UK can buy electricity from Europe when needed.

The Department for Business, Energy and Industrial Strategy said: “As this report shows, the UK’s secure and diverse energy supplies will ensure households, businesses and industry can be confident they can get the electricity and gas they need.

“Britain is in a fortunate position, having access to our own North Sea gas reserves, imports from reliable partners like Norway, the second largest LNG (liquid natural gas) port infrastructure in Europe, and a gas supply underpinned by robust legal contracts.

“Thanks to a massive £90 billion investment in clean energy in the last decade, we have one of the most reliable and diverse energy systems in the world, and unlike Europe we are not dependent on Russian energy imports.”

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