London, U.K. --- (METERING.COM) --- July 2, 2013 - With increased risks to security of supply in Britain, and concerns of possible blackouts by 2015, National Grid, the owner and manager of the nation’s grid, is proposing to have available two new balancing services to help manage its day to day operation – demand side balancing reserve, with supplemental balancing reserve as a back-up.

Demand side balancing reserve would involve seeking large consumers (or demand side aggregators) to reduce (or shift) electricity use during times of high demand (between 4 and 8 pm on weekday evenings in the winter) in return for a payment.

Supplemental balancing reserve will involve contracting with generators that would otherwise be closed or mothballed. However, this reserve would be deployed only as a last resort in lieu of taking emergency action to balance the system, and it’s unlikely that it would be used.

National Grid says that it is consulting with the industry on the design of the two services.

“This does not mean that disruption is imminent or likely, but Ofgem, DECC and ourselves believe it appropriate to consider what measures could be taken in case margins deteriorate further,” the company said in a statement.

In its electricity capacity assessment released last week, Ofgem said that more than 2 GW of installed generation capacity will be withdrawn in the near future, with further withdrawals still likely. These withdrawals, principally of coal and oil generation, are due to age and European environmental legislation. However, while wind is expected to grow, no new conventional plant is expected before 2016.

A key uncertainty in Ofgem’s analysis is the peak demand, which has fallen by around 5 GW over the last seven years due mainly to the economic downturn and improvements in energy efficiency. Further demand reductions are projected due to increased energy efficiency in the domestic sector and increased demand side response. However, should these fail to materialize, the probability of a large shortfall requiring the controlled disconnection of customers is estimated by Ofgem at around 1 in 4 years in 2015/16, up from around 1 in 47 years in the coming winter.