The operator of Britain’s electricity system says it is to keep a scheme that aims to help prevent blackouts for the coming winter.
National Grid ESO said it was “prudent to maintain” the demand flexibility service (DFS), which was introduced in 2022 in the wake of Europe’s gas squeeze caused by the war in Ukraine.
The operator added that the terms of the scheme were now out for consultation.
Its early winter outlook report, due to be updated in September, expected sufficient capacity to meet demand this winter after the turmoil leading up to 2022/23 when gas flows from Russia were stopped.
A forecast a margin of 8% – in line with most winter periods and up on the wriggle room it had expected last year.
But it also confirmed there would be less coal-fired generation held in reserve.
“We are continuing to have discussions on the availability of having two coal units in contingency contracts this winter.
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“One of the units held in contingency last winter has returned to the market. The other two units have now closed”, the ESO explained.
The DFS, which was activated for the first time in January after a series of tests and false alarms, sees volunteer households paid to turn off their main appliances at times of peak demand.
The UK played a pivotal role in helping supply the continent with gas ahead of last winter amid a race to fill storage and stop the lights going out given its historic dependency on Russian gas.
The country, however, tends to import electricity during the winter months.
A relatively mild 2022/23 winter, coupled with alternative supply, meant Europe ended last winter with a record volume of gas in storage.
The report said of Britain’s electricity output: “We expect there to be sufficient operational surplus in our base case throughout winter.”
While the ESO is confident on the capacity issue, market experts still expect gas and electricity costs to go up over the colder months as demand spikes.
It could mean that household bills, through the energy price cap, start to rise again.
The cap kicks in again from July following the end of the government’s energy price guarantee that limited the wholesale prices that consumers faced.
The level of the cap, at just above £2,000 for the average annual bill, is well down on the £2,500 estimate under the guarantee.
Futures contracts for natural gas see peak prices of 149p per therm in January.
July’s contract is running at just under 100p.
