After using their ‘last resort’ emergency powers to implore UK companies to cut their electricity usage, National Grid revealed that yesterday they had to spend at least £2.5 million to prevent severe power shortages after most of their ‘safety nets’ failed.
The power transmission infrastructure controllers implemented two emergency measures after they issued a ‘notice of inadequate system margin’ (NISM) on Wednesday. They requested an extra 500 MW of power for around two hours during the afternoon, paying them around £2,500 per MWH, totalling around £2.5 million.
The first of these measures (the ‘demand side balancing reserve’, or DSBR) required large companies to cut down their power usage by around 40 MW each, something that industry experts have estimated costs significantly below £1 million. This is the first time the DSBR has been used, with it previously being described as something that should “only be used as a last resort, after all other actions available in the market have been exhausted.”
Thankfully this allowed Nation Grid to avoid having to resort to their final measure, the ‘supplemental balancing reserve’, or SBR, which would have meant requiring power suppliers to re-open unused power stations in order to manage the power shortage.
Had they resorted to the SBR, the time it would have taken to fire-up these back up stations would have meant that Britain could have faced ‘brown outs’; a small step above black outs that involves lights being dimmed across the country in order to save electricity and prevent all out power cuts.
“National Grid has now begun using emergency measures to prevent blackouts” said Lisa Nandy, the energy spokeswoman for Labour. She placed the blame squarely on the government’s energy policy. “The chopping and changing of energy policy under this new government is creating an energy security crisis” she went on, “it is preventing investment we now urgently need to keep the lights on and it could cause household bills to rise. David Cameron should step in and end the policy vacuum to get new power stations built as quickly as possible.”
Following National Grid’s warnings about power shortages, prices for every soared, going up from around £55 per MWH to close to £500. The overall cost of putting all of the emergency measures in place (this is before they were even implemented) is estimated to be around £36.5 million, though this translates to little more than 50p per year per household.
This all comes hot on the heels of the news that National Grid’s CEO, Steve Holliday, had retired after 10 years, to be replaced by John Pettigrew. Pettigrew will have his work cut out for him, it seems.