National Grid begins second round of winter capacity tendering

National Grid has opened its second tender round to secure an extra 1GW of capacity ahead of the mid-decade capacity crunch this coming winter.

The latest tender follows the first round held late last year where it secured 700MW of supply and demand contracts to help balance the grid in winter 15/16, when margins are expected to be at their tightest.

“We want demand side providers and power station operators to come forward and ensure a competitive tender. We’re particularly keen to see large energy users come forward to join this voluntary scheme,” said National Grid’s director of market operations Cordi O’Hara.

To help increase the amount of supply available to the system National Grid has already offered contracts to two Centrica-owned gas-fired power plants, South Humber Bank and Barry, which will be contracted to provide 40MW and 227MW respectively. In addition Corby Power’s gas-fired plant has been contracted to provide 353MW of power for next winter.

On the demand side National Grid offered contracts to power users able to cut their use of grid power when required at times of system stress through so-called demand-side balancing reserve (DSBR) contracts. In the operator’s methodology the 300MW of contracts offered to users, will only be relied on to supply 84MW due its ‘derating’ as a relatively unproven technology.

For winter 2014/15 SBR contracts were awarded to SSE’s Peterhead gas-fired power plant, RWE’s Littlebrook and Scottish Power’s Ryehouse gas-fired power plant following unexpected outages over the summer which temporarily reduced winter’s expected margins to fall in line with winter 2015/16 expectations.

“We already know that the margin between supply and demand next winter could tighten further,” O’Hara added.

The contracts from this second tender round will be offered in May 2015, National Grid said.