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National Grid shells out £4.6mln as back-up coal stations used for first time

Published 08/03/2023, 12:15
Updated 08/03/2023, 12:41
© Reuters National Grid shells out £4.6mln as back-up coal stations used for first time

© Reuters National Grid shells out £4.6mln as back-up coal stations used for first time

Proactive Investors - Two back-up coal power stations were used on Tuesday and some £4.6mln spent on the balancing market as freezing temperatures gripped the UK.

A lack of wind and colder weather in UK, alongside mass strikes by French workers, prompted National Grid PLC’s system operating wing (ESO) to bring the coal-power stations online as a last resort.

Both EDF) Energy-operated coal plants in Nottinghamshire supplied power to the grid, marking the first time this winter the UK’s contingency power had been utilised.

Alongside this, £4.64mln was spent on the balancing market, where generators are paid to react to demand in real-time, up 154% from £1.83mln on Monday and 440% on Sunday’s £0.86mln, according to the ESO.

Combined, these three days cost £7.33mln, equivalent to 1.5% of the £500mln spent on the market in four months between November 2021 and February 2022

These costs are recovered by the ESO by charging generators and suppliers, which ultimately add them to household energy bills.

Electricity from EDF’s coal plants made up roughly 5% of Britain’s generation in the evening, which faced a peak demand of 42.5GW, compared to the annual average of 30.1GW, as per grid.iamkate live stream data.

Almost 1.3mln people took part in strikes in France on Tuesday over planned pension reforms, including thousands of power workers, prompting the country to rely heavily on neighbours to keep the lights on.

Britain, which is obligated to supply power across the channel under an agreement between the ESO and French operator RTE, was exporting around 2GW in the evening as a result, alongside almost 1GW being sent to Ireland.

LCP Delta electricity market specialist Shivam Malhotra explained concern around tighter margins on the UK’s grid had been triggered by the strikes in France.

Discussing the need for EDF plants, he added: “These contracts are only intended to be used when all commercial options have been exhausted by National Grid .”

Two coal units at the Drax Group power station were also warmed, in preparation to supply extra power to the UK, although these are not understood to have been used.

Five coal-power plants were kept from decommissioning by the government’s business department last August in anticipation of winter struggles after the Ukraine war hit supply and caused a hike in gas prices.

Keeping the five units running was anticipated to cost £420mln, according to the ESO, with both Drax and EDF being paid to maintain and heat the stations if needed.

Read more on Proactive Investors UK

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