Post: NESO forecasts highest margins since 2019-20

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. 

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