ESO sets out early expectations for winter
15 Jun 2023 - 2 minute read
To support the energy industry’s preparations for the 2023/2024 winter, we've published our Early View of Winter Outlook report.
As ususal, a more in-depth Winter Outlook report will be published later in the year to provide more up-to-date information relating to the coming winter.
This year’s Early View uses a Base Case scenario to assess the availability of operational margins under average weather and normal weather conditions. The operational margin outlines the expected availability of excess generation above the electricity needed to meet demand and the reserves held by the ESO at all times.
This year’s report finds that the de-rated margin in this Base Case scenario is 4.8GW (around 8%). This is slightly higher than this time last year but is relatively in line with margins across previous winters.
The increased margins compared to last year are driven by the availability of additional new generation, improved data quality, the availability of generation units that were partially or fully unavailable last winter and the return to the capacity market of one of the coal contingency units used last winter, which will now operate in the normal electricity market for this year.
In light of the continued risks and uncertainties relating to the Russian invasion of Ukraine, we continue to explore the potential availability of additional operational options.
We are proposing the return of our groundbreaking Demand Flexibility Service, used last year to incentivise consumers and businesses to reduce their electricity usage at specific high demand periods. A formal consultation is open until 17 July to determine the final terms of this year’s service. Further details of the service will be available after then.
Following a request from the Government, we are continuing discussions on the availability of two of the five coal contingency units used last winter.
As part of our annual process of reviewing the 2022/23 Winter Outlook, we can report that winter margins were broadly in line with those of our Base Case from the 2022/23 Winter Outlook Report.
Through the use of normal operating tools, the availability of contingency coal contracts and the Demand Flexibility Service, we were able to operate within operational margins, meaning that there was no interruption to customer demand due to unavailable supply on the national electricity transmission system.
Across the 2022/23 winter, balancing costs were around 20% lower than the preceding winter of 2021/22, though these costs remained higher than other previous years, driven principally by gas wholesale prices.