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UK safe from winter blackouts, says National Grid

Image: National Grid.

Image: National Grid.

National Grid will have a greater power margin this winter than first expected, effectively putting to bed any fears over blackouts this winter.

This year’s winter outlook, which covers the first delivery year of the Capacity Market (CM), expects there to be “sufficient generation and interconnector imports to meet demand”.

In another first, and in response to the growing role of generation on regional networks, total underlying demand system quotas have been expressed across both the transmission and distribution systems to align with the approach taken in the CM.

The margin forecast for the coming winter sits at 6.2GW, or 10.3%, on an underlying demand basis, while on a transmission demand basis the margin is 11.5%.

The total maximum technical capability this winter has been forecast as 101.2GW (66.1GW de-rated) to meet underlying demand. This value excludes interconnectors but includes wind and solar.

This is an increase in spare capacity from June’s Winter Review and Consultation document, which included a preliminary view of the margins for winter 2017/18 in the range of 3.7 to 4.9GW.

Since the review document was published, new market information has indicated that further plants without a CM contract will be available to the market this winter, as well as a coal plant and a combined cycle gas turbine (CCGT) which were assumed to remain operational without CM contracts.

These generators have now been joined by capacity from one further CCGT and two biomass conversion plants, plus additional capacity from an existing CCGT.

This means that more capacity than will be needed was procured in the early auction completed in February (54.43GW) and the transitional arrangements auction which sought demand side response capacity and secured 312.171MW.

However, government has already moved to lower its future procurement targets through the CM mechanism, with secretary of state Greg Clark notifying National Grid in July that it would be seeking 50.1GW for delivery in 2021/22.

Only 6GW of additional capacity will be sought in the next T-1 auction for delivery in the 2018/2019 winter period, although it is unknown if this target will drop to the minimum of 5GW in light of the additional underused capacity shown in the latest winter outlook.

Winter revenue opportunity for generators

Peak transmission system demand forecast is 50.7GW, with the lowest level of operational surplus expected in the week commencing 11 December due to the number of generating units expected to be on planned outage during demand peak.

This means that generators intended a planned outage at this time could be eligible for incentives to make their assets available through their Capacity Market obligations, or through the revenue opportunity from higher prices in the market that often occur during these periods.