The National Grid & the Balancing Mechanism

The National Grid & the Balancing Mechanism. There are some of the most extreme weather events in history happening to […]

Posted on Dec 15, 2021
National Grid & the Balancing Mechanism

The National Grid & the Balancing Mechanism.
There are some of the most extreme weather events in history happening to our planet at a rapid rate right now. These are events that have been proven to be linked to the way that we treat the planet. Climate change is not a new concept, but it’s one that we’re not fixing fast enough, and solving this crisis involves more than one sector and nation working together.

One of the biggest challenges for this in the UK is integrating more renewable energy into the National Grid while maintaining its stability at the same time. The National Grid is complex in the UK and the supply and demand of electricity by the consumers has to be in a constant state of balance.

This can, however, prove to be a challenge but energy storage has been listed as the key technology in supporting the National Grid. The whole network is complex, but in this article, we untangle both the Balancing Mechanism and the National Grid.

National Grid & the Balancing Mechanism

What is the National Grid?
The National Grid is the main system operator for gas and electricity supply in the UK. It’s the company that manages the network, and they also manage the distribution of the gas and electricity that powers the homes and businesses across England, Scotland and Wales.

It is made up of high voltage power lines and pipelines for gas, and there are storage facilities and interconnectors, too, that all work together for the distribution of electricity across the UK.

The National Grid has been at the forefront of electricity and gas supply for years, and a revolution is taking place right now in the energy industry and the future of the National Grid is changing. There is more investment in innovation and flexible technologies for the generation of power, and the Balancing Mechanism is a part of all of that.

What is the Balancing Mechanism?
The Balancing Mechanism is something that the National Grid can use to balance supply and demand in real-time with the National Grid. The world is moving toward renewable energy sources and away from fossil fuels, and that means that the National Grid and the Balancing Mechanism have to figure out how to deliver new ways to manage the demand on our energy supply in the UK.

The National Grid is going to look at a predicted generation of energy and demand to see whether or not these match together. If there is a difference in this, the Balancing Mechanism is designed to support the National Grid.

The National Grid talks about the Balancing Mechanism being the ultimate flexibility market. It’s something that ensures that the supply and the demand of the electricity supply are balanced for every half-hour trading period.

The price of electricity changes quickly and those participating in the Balancing Mechanism can work on submitting bids and offers to increase or decrease their generation. This can be done up to an hour before delivery, and this can then be accepted by the National Grid to balance the system properly.

The increase in renewable energy that comes into the system makes it harder for the network to be balanced by the National Grid, which leads to volatile results in the Balancing Mechanism. This then offers better flexibility for others.

How is the Balancing Mechanism made more accessible?
Right now, the Balancing Mechanism is overruled by larger generators. There have been regulatory changes recently, though, that have led to smaller aggregated units being used to access the market more easily. This is a change that will help to better manage the dispatch and data flow that enter the Balancing Mechanism.

Who Benefits from the Balancing Mechanism?
The Balancing Mechanism applies to any business out there that has flexible power and can provide a fast response. This is a flexibility that can come from any energy storage option – like batteries. There shouldn’t be too much business disruption from the Balancing Mechanism as it can take up to 30 minutes to participate, and anyone can adjust their bid and offer costs that are based on opportunity.

The benefits of the Balancing Mechanism are such that businesses can benefit from an additional, significant revenue stream. This can help to diversify income and strengthen it at the same time. This then leads to the support of the infrastructure in the UK. It can be difficult to predict precise financial returns and there are key variables that impact returns, such as how participants can price themselves and their locations to where the National Grid is.

Guide to the Balancing Mechanism