Walking the electricity system tightrope
When electricity demand increases – during cold weather, for example – businesses want to be sure they’re able to get the energy they need. For this to happen, the system must be in balance – with supply matching demand. So, how does this work, who’s walking the tightrope, and who pays for it all?
Read more below:
Balancing the electricity system to ensure the country’s homes, businesses, hospitals and other consumers have enough power is a round-the-clock operation for National Grid.
As system operator, it passes on the costs of balancing the system to suppliers and generators. This takes the form of ‘Balancing Services Use of System’ (BSUoS) charges, which then appear on your electricity bill. BSUoS, plus all the other third party costs, make up around 60% of the bill total – with the other 40% being for the electricity you’ve used.
BSUoS charges rise and fall, depending on how much work National Grid – and its contracted partners – do to keep the system balanced. For example, at times of peak demand, National Grid may have to pay generators a higher rate to ‘switch on’ extra production capacity at very short notice. Alternatively, the system operator might pay generators to switch to self-generated and/or stored electricity through power management schemes like Haven Power’s Demand Side Response. Effectively, such schemes reward participants for being able to ‘turn off’ demand upon request.
At other times, National Grid may not need to pay for extra capacity at all. For example, on very windy or sunny days, a large proportion of the country’s electricity will be generated cheaply by wind turbines or solar panels.
At the times when the system is “over-supplied” with too much power, National Grid pays some generators to ‘turn off’ capacity. The system operator also has to keep the frequency at a constant 50Hz as it flows through the Grid.
As mentioned, all electricity suppliers and generators pay BSUoS charges – and they do so proportionally. The costs passed on to customers can add up to as much as 2% of the total electricity bill for a business.
While that may seem a lot, we believe it’s a small price to pay for the peace of mind of knowing the electricity you need is always there when you need it.
If you’d like to find out how Haven Power can help your business with its energy, please get in touch using our contact form.Contact us
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