Firms picked to use less power for cash

National Grid has awarded contracts for an extra 2.56GW of electricity to cover potential higher demand during winter 2015/16. The reserve capacity is estimated to cost around £36.5 million – […]

Register now!

By Priyanka Shrestha

National Grid has awarded contracts for an extra 2.56GW of electricity to cover potential higher demand during winter 2015/16.

The reserve capacity is estimated to cost around £36.5 million – or 50 pence per year on the average consumer’s electricity bill.

That’s in comparison to £31.3 million for the extra 1.1GW bought for winter 2014/15.

The additional capacity for the winter follows the conclusion of the second tender round for Supplemental Balancing Reserve (SBR) and Demand Side Balancing Reserve (DSBR).

Under the DSBR, National Grid will pay large energy users to lower their electricity use between 4pm and 8pm during weekdays while the SBR will provide a contract for energy reserves from power plants that would otherwise be closed or mothballed.

SSE won four contracts, GDF Suez bagged two while Centrica and Uskmouth Power have both been awarded one contract each.

Cordi O’Hara, Director of Market Operation at National Grid said: “As operator of the electricity system, it’s our role to ensure we’ve got the right tools in place to balance the system in even the toughest winter conditions.

“Our competitive tender has secured the reserve we need to do our job, as early as possible while providing market certainty and keeping costs down for consumers.”