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Posted 1 month ago | 2 minute read

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NESO forecasts highest margins since 2019-20

The National Energy System Operator (NESO) has said it expects that there will be adequate margins through the winter to ensure Great Britain remains within the reliability standard.

In its Winter Outlook report, published on 8 October, NESO said it expects margins this winter to be adequate, with the base case de-rated margin forecast to be 5.2GW (representing 8.8% of peak average cold spell demand). The expected margin for this winter is higher than last year, which saw a forecast of 4.4GW (7.4%).  It represents the highest forecast since 2019-20 and is broadly in line with recent winters. This assessment for Winter 2024-25 assumes a peak average cold spell demand of 59.8GW, including operating reserve.  

The higher year-on-year margin is driven by new interconnection, growth in battery storage capacity and an increase in generation connected to the distribution networks. This combines to more than offset generation retirements – such as the recent closure of Ratcliffe-on-Soar, the UK’s last coal fired power station – and other temporary capacity reductions.   

De-rated margin in relation to generation capacity and demand

Source: NESO

While in previous years the Demand Flexibility Service (DFS) has been used as an enhanced action, as part of our winter contingency toolkit, NESO said it will not perform that function this year. Instead, given the improved operational outlook for this winter DFS has been redesigned to operate in the commercial marketplace to help manage margins. Once approved, NESO will be able to use DFS throughout the year, allowing consumers and businesses to compete directly with power stations and renewables. 

Mark Davis, GridBeyond’s COO, said:

“Should we experience periods of supply tightness this winter, we would expect power prices to escalate. Businesses that are able to take part in programmes to reduce demand during peak events could reap the rewards. However, expectations of tight conditions and high prices will be of concern to businesses without interruptible or flexible load. One way businesses can sure up their resilience is through investment in on-site battery storage or generation assets.

“GridBeyond is already working with our clients to create opportunities from energy storage. Whether you already have storage on-site and are looking to optimise it further or are looking for a CapEx free battery for your site, GridBeyond can support your business this winter.”

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