Overpowered: has the UK paid over the odds for energy security?

The Energy Act of 2013 ushered in reforms of the electricity market designed to deliver the “trilemma” objectives of security of supply, low cost and decarbonisation during a period of major technological change. Among its provisions was that for four years (subsequently shortened to three), National Grid would procure contingency measures in case the amount of ‘dispatchable’ generation – units that can be turned on and off at will – in the regular power market proved insufficient to deliver secure supply during winter peak demand periods. The fleet of stand-by power stations held outside the regular power market went under the name of the Supplemental Balancing Reserve (SBR).

In this ECIU report, we review operation of the electricity system during the three winters for which the SBR operated. Somewhat remarkably, in view of the regularity with which graphic warnings of “blackouts” appear in public life, the SBR has not been used once. Its total cost to bill-payers during these three winters has been about £180 million.

To download the report, click here.