The Supplemental Balancing Reserve (SBR), a back-up power scheme, that cost a total of £180m over its three year life span has ended without ever being used, according to a new report from the Energy & Climate Intelligence Unit.
The SBR comprises a “fleet of stand-by power stations held outside the regular power market”, ready to be switched on and off at short notice should National Grid’s regular distribution network fail to provide power commensurate to demand at any time. It was introduced in 2014 under 2013’s Energy Act as one way of working towards a solution to the energy trilemma – that is, the need to maintain a regular and secure energy supply, at low cost, while working towards decarbonisation.
However, the report explains, despite several warnings about stretched energy supply and even blackouts in some cases, the SBR has not been used once.
The ECIU explain that warnings based on tight capacity margins are misguided. The capacity margin (that is, the difference between power supply and demand) was at 5.1% and 6.6% respectively for the past two years but this is not, in itself, as problematic as it at first seems. These kinds of margins are comparable to those seen around ten years ago but what has dropped quite sharply since then is the rate at which National Grid resort to their own internal emergency power measures – Notices of Insufficient Supply Margin (NISMs).
NISMs are issued at times when energy supply is particularly tight and act as a “request for additional capacity within the regular power market”. NISMs were issued in both of the first two years of the SBR’s lifespan, but none were issued this last winter – a winter racked with issues that could have drastically threatened supply.
“Simply put,” the report says “supply and demand can be managed far more efficiently in this era of smarter technology, with demand-side balancing proving cheap and effective”.
Attempts made through investment in new capacity to try and push the capacity margin above 10% are, in the ECIU’s view, superfluous in that they represent “a call to fix a problem that doesn’t exist”.
The UK’s power system, they explain, is currently operating at 99.999993% reliability and “during the fairly rapid advent of variably-generating renewables, the grid has become more rather than less reliable” despite warnings to the contrary. Not only are attempts to boost capacity margins largely unnecessary, they are expensive too.
Jonathan Marshall, ECIU energy analyst said: “The clear message from this report is that paying to boost spare capacity in Britain’s electricity system can be very expensive, and potentially unnecessary.
“The drop in the number of calls by the Grid for extra power last winter also suggests that, in an era of smarter technology, balancing supply and demand is becoming easier and cheaper. This begs the question of whether calls to increase our capacity margins in the UK, for example by a new ‘dash for gas’, are sensible, given that doing so comes with a price tag in the billions of pounds.” And that cost would fall at the feet of bill payers.
