National Grid believes there will be sufficient generation and interconnector imports to meet demand throughout this winter.
In its latest Winter Outlook for 2016/17, the grid operator has increased the gap between total power generating capacity and peak demand to 6.6% from the 5.5% for winter 2015/2016.
That means the generation margin for the coming winter has increased from 2.9GW to 3.4GW.
Why? Well additional generation capacity at Eggborough power station has returned to the market and an outage on the East West Interconnector has decreased expected exports to Ireland.
The report added: “The last few winters have been mild but we are not complacent. We have taken additional actions to improve the outlook for this winter and the de-rated margin includes the supplemental balancing reserve services that we have procured. We anticipate that we will use these services this winter to help us balance the system.”
The operator also expects electricity demand to peak at 52GW in December and regarding forward prices, it suggests that there will be net imports of electricity from Continental Europe to the country at peak times during the same period.
In terms of gas, National Grid said it is also confident that there will be sufficient supply to meet demand this winter.
It believes gas will be cheaper than coal for electricity generation this winter, however the operator also said, from November onwards the price difference between gas and coal will become narrower which may increase competition between the two fuel types.
Total gas demand for winter is forecast at 49.1 billion cubic meters, said the operator.
It added demand for gas exports will be lower than last winter.
Phil Sheppard, Director of SO Operations said: “Since publishing the provisional winter margin in July, additional electricity generation has been made available to the market. This has had a positive impact on the outlook for winter, increasing the margin between potential supply and demand.
“To make sure we have the right tools in place to effectively operate the electricity system, we have procured contingency balancing reserve services for winter 2016/17. This will be the last year that we procure these transitional services.”
Cordi O’Hara, Director of UK Operations at National Grid , will be speaking at Energy Live 2016 on November the 3rd in London. Get your tickets here.
There are limited free tickets available for end users.