UK system balancing costs more than double in May as constraint fees soar

London — Balancing costs for May on the UK electricity grid were more than two and a half times year on year as constraint/rebalancing payments to gas plants more than tripled to GBP69 million ($86 million) from GBP20 million, according to data from National Grid.

Total balancing services use of system (BSUoS) costs of GBP162.71 million for the month compared with GBP62.96 million for May 2019, the increase reflecting system challenges posed by low demand and, as a proportion of the generation mix, higher renewable energy production during an unusually sunny month.

Adding to the escalating costs were constraint payments to wind farms of GBP21 million, up from GBP8.3 million for April 2020, and from GBP4.19 million for May 2019.

In January-May, UK balancing costs of GBP717.3 million were GBP257 million higher year on year.

In mid-May National Grid warned an extended period of low summer demand due to coronavirus lockdown arrangements could push balancing costs up to GBP826 million for the four months to September this year, almost GBP500 million more than for the same period last year.

In February the system operator forecast 2020-21 balancing costs would come to GBP1.478 billion. On May 15, National Grid updated this forecast to around GBP2 billion.