Firms Paid To Prevent Electricity Blackouts

National Grid has begun offering to pay firms to manage their electricity use from this winter to help prevent the 'lights going out'.

The company, which runs the power network in England and Wales, is asking the largest energy users to agree to cut their usage at peak times over the next four winters to help prevent possible blackouts.

National Grid said any requests to reduce power consumption would apply between 4pm and 8pm on winter weekdays and would add no more than £1 annually to the average household energy bill.

The Demand Side Balancing Reserve service (DSBR), as the scheme is being called, would only be enacted on a voluntary basis, the company insisted.

National Grid was also looking, from winter 2015/16,  to boost capacity from electricity generators that would otherwise be closed or mothballed between the hours of 6am and 8pm on winter weekdays.

Both initiatives followed a consultation exercise.

Worries about power shortfalls have grown in recent years following the closure of many old generators under European emissions rules.

Fierce debate among politicians, industry figures, communities and environmentalists on replacing them and extending capacity has delayed addressing the issue.

It was anticipated, the power operator said, that both initiatives would not be required in 2018/19 because the Government was introducing reforms to ensure sufficient capacity was available to meet future demand.

National Grid's Peter Bingham said: "It's our job as electricity system operator to make sure we've got all the right tools at our disposal to balance supply and demand on the electricity network, 24 hours a day, 365 days a year.

"For winter 2014/15 we are inviting providers of demand side response services to offer a small volume of demand reduction capability to pilot the new DSBR service.

"For winter 2015/16, we will tender for both services. This offers generators an incentive to make their power stations available in winter where they might otherwise be unavailable."

Dermot Nolan, Ofgem Chief Executive, said: "Ofgem has taken decisive action by giving National Grid additional tools to manage lower electricity margins from this winter, when Britain will have less generation available. We welcome their announcement on tenders for using these tools.

"An early indication of our analysis shows that the risks to security of electricity supplies for next winter are going to be very similar to last winter. And while no electricity system anywhere in the world can give a 100 per cent guarantee we are confident that National Grid has the right levers to keep the lights on for households this winter. However, there can never be any room for complacency: National Grid and the industry must be vigilant at all times."

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