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Chart of the Week

2020

New to the party: Recent changes in Balancing Mechanism activity

Lee Drummee Analyst

The Balancing Mechanism (BM), one of National Grid Electricity System Operator’s key tools to balance supply and demand in real time, has experienced a notable increase in activity in 2020, especially in light of the heightened challenges that have come from COVID-19. In the BM parties submit bids and offers to the ESO, providing details on their availability to adjust generation or demand and the price at which they are willing to do so if required. During April and May 2020, when lockdown restrictions were at their peak, the volume of accepted actions in the BM more than doubled compared to the same time last year. In this 'Chart of the week', we explore changes in the BM as lockdown restrictions have eased and electricity demand resurged, and if this trend of greater balancing activity has continued. The charts show the accepted volumes in the BM across all technologies in the June – August 2020 period and how this compares to 2019 levels. Total volumes of accepted actions on the BM remained significantly higher in 2020 than in 2019 for June and July, but activity in August subsequently dropped. The total volume of actions across June – August 2020 totalled 9.1TWh, up 40% on the same three months in 2019. Perhaps more interesting is the changes in the technologies that have been providing these balancing actions to the ESO. The only technology to see a year-on-year decline in activity for these three months was coal. Some rises are more notable than others, with newer asset types such ...

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