Higher balancing costs for the National Grid

Article posted

20th Jul 2022

Read time

2-3 min read


Mollie Pinnington

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When the National Grid must buy additional energy from generators to support demand, this is called balancing costs. This usually happens because of unexpected weather conditions. Last winter it has been reported that there were unusually high costs in the balancing market as more than £60 million was spent. 

The National Grid’s ESO report found that balancing costs have tripled compared to previous years. Bad weather however was not the only contribution to this. The main reason for the high prices was large energy generators changing running time and increasing prices in a short period. This led to the ESO having no choice but to accept many offers at high prices to balance supply and demand.

Ofgem has addressed this issue as the ongoing gas price is putting consumer bills under immense pressure. The cost that it takes for the National Grid to balance the UK’s power system also makes up around 2% of consumers’ electricity bills. Due to this many people are calling out for a change in the system. Many people say Ofgem must close loopholes that are allowing the poor practice to take place.

With the cost-of-living crisis that is going on in the UK, it is unacceptable for energy generators to make extra profits from consumers’ energy bills.   

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