Neso told to keep spare generating capacity on standby amid blackout fears

Ed Miliband has opened the way for a fleet of new gas-fired power stations to back up Britain’s wind and solar farms. The Telegraph has the story.

He has told the National Energy System Operator (Neso) – the UK’s grid operator – that by the end of the decade it must keep 40 gigawatts (GW) of spare generating capacity on standby for days when wind and solar cannot keep the nation’s lights on.

The request is part of a system known as the capacity market, where companies are paid to keep generating capacity on standby for days when renewables output plummets or demand surges.

The capacity market already costs British consumers about £1.3bn a year – but this will surge to £4bn by 2030 as reliance on renewables increases, the Office for Budget Responsibility (OBR) has said.

Mr Miliband’s letter to Neso has told it to ensure it has 40GW-worth of back-up generating capacity on the system, roughly equating to the output of 35-40 large gas-fired power stations. About two thirds is expected to come from gas and the rest from batteries, interconnectors and other sources.

The riches available to power companies via the capacity market has caused a mini-boom in construction of gas fired power plants. Neso’s list of projects seeking grid connections has more than 100 new gas-fired power stations planned around the UK.

Most are smaller than the large power plants built in the past but designed to be more flexible, meaning they can ramp their output up and down according to demand and the price of power.

They make their profits partly from being paid to be on standby and partly from operating only when power prices surge to unusually high levels – as often happens when low winds reduce windfarm output.

Read the full story here.