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The National Grid Balancing Market: What is it and why does it matter?

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By Olly Rose
Aug 18, 2021

We recently joined the balancing market, National Grid’s main tool for keeping Britain’s electricity network balanced between supply and demand.

It’s something we’ve wanted to do for some time because it’s an essential step in getting more green energy into Britain’s fuel mix. Coupled with our new battery project to help smooth out delivery from renewable sources, it’ll showcase how the country’s electricity supply can work in the future.

We spoke to Ecotricity’s Smart Grid Aggregation Analyst, Peter Dennis to find out more about the balancing market, the National Grid, and why this is such an important step in the future of renewables in Britain.

Why does electricity need to be balanced?

National Grid needs to keep generation closely matched to consumer demand across the country at all times, down to the nearest few seconds, to keep the grid stable.

Too little electricity means people will suffer power shortages or blackouts.

Too much electricity destabilises the grid because the system frequency starts to rise - generators start to trip if it deviates too far from the standard 50Hz that we’re all used to.



How does the balancing market help?

National Grid takes information from all the electricity generators about what they're going to generate and makes a forecast of what everyone is going to use.

It then uses the balancing market to keep supply and demand stable by paying the generators to turn up or turn down, or switch on a new generator that wasn't otherwise planned to be running.



How does this work with renewables?

Renewables will generally be producing as much as they can, based on the available sunlight, wind or hydro. At the moment, the only option is to turn them down at times when there's too much energy to avoid destabilising the grid.

National Grid frequently turns down wind, particularly in northern Scotland. There's a lot of wind up there and not a lot of demand. All that energy needs to be shipped southwards but the cables aren't big enough to take the load at times.



Why has Ecotricity joined the balancing market now?

For a long time, costs have stood in our way of joining our generation sites to the balancing market. What's changed in the last year or so is a new inception called 'The Wider Balancing Market' which has made entering the balancing market a lot more palatable for smaller offerors like ourselves.

So far we’ve joined with a couple of wind parks, with more on the way. We've gone through the testing procedure with National Grid, got through all the communication requirements and we’re now supplying them with data that they've never had directly from us before, so that they actually know what we're producing. And they can ask us to turn down if they so wish.



How does this help make Britain greener?

If we keep adding renewables to Britain’s fuel mix, which we urgently need to do, we need to be able to balance the grid more effectively.

There's only so much intermittent renewable generation you can add to a system before it becomes too unstable because the wind gusts and drops, and that output is constantly changing.

By taking part in the balancing market, we're going to make the green renewables we build part of the solution to balancing the grid. It will enable more renewables to be added to the National Grid, more quickly.



How do batteries fit into the plan?

Things get even more interesting when we start connecting batteries to renewables. We’ll soon be deploying our first battery – in our view, batteries and the balancing market go hand in hand.

For instance, if we generate more during the day on solar than needed, the surplus energy will go into the battery, ready to be used at peak times like early evening.

Batteries are an enabler for more green energy, to help us match supply to demand, which can be difficult to do purely with renewables.



Is the future going to be green energy in partnership with battery storage?

Flexibility is the overarching theme and batteries are the most flexible tool we have. Typically, the grid relies on “pumped hydro” - pumping water uphill into large lakes and reservoirs as a form of energy storage. We've also relied on interconnectors with other countries, soaking up power from France or pushing back to them when we have too much.

Batteries will be cheaper and more flexible than pumped hydro – and they can be deployed just about anywhere as well. You don't have to flood a valley!

If the National Grid can’t get the flexibility it needs from pumped hydro and interconnectors, its next line of defence is to call on dirty gas and coal fired generators, running them inefficiently at half power so they’re ready to change their output. Entering the balancing mechanism is just another step in helping Britain move on from fossil fuels.



How does this help the National Grid?

You have to know a little about how the National Grid works. The boundary map you can see below divides the country into transmission zones. Ideally, if you've got a surge of demand in zone 11, for example, you want to meet it with generation from zone 11 rather than having to pull it in from other areas. This is because the connections between each zone are of limited capacity – there’s only so much energy you can send from zone to zone.


The northern Scotland boundary gets constrained quite frequently. There's a lot of wind up there and sometimes the cables just aren't big enough to send all the electricity being generated southwards. So National Grid frequently pays to turn off wind mills up there.

In the future, that would be a really good location to have batteries – rather than just losing all that wind energy, you could soak it up and release it later when there’s enough capacity to send it to the rest of the country.

Green energy is winning the argument at every level. Switch to Ecotricity and we’ll use your bill money to invest in new sources of renewable energy and build a greener Britain.

Switch today

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