Keeping the lights on 24/7: the Balancing Mechanism

The thousands of households in the north of England left without electricity for more than a week following the damage wreaked by Storm Arwen in late November had a harsh reminder of just how much we need a resource we normally take for granted.

Most energy consumers have very little awareness of the hugely complex operation behind the 24/7 supply of electricity to households and businesses across Great Britain.

One of the biggest ongoing challenges to the National Grid Electricity System Operator (NGESO) is phasing out traditional generating sources such as coal and gas power stations in favour of renewables - while maintaining a constant state of balance with demand.

With a target of achieving net-zero carbon production by 2050, there are significant technological advances being made.

In 2020 renewables overtook fossil fuels in Great Britain for the first time, with 42 per cent of electricity generated by wind, sunlight, water and wood compared with 41 per cent generated from gas and coal plants.

But the sun doesn’t always shine and wind conditions are not always favourable, either being too calm or ironically too windy for turbines to operate.

This is where the Balancing Mechanism comes in.

Launched in 2002, the Balancing Mechanism is one of the tools National Grid uses to balance electricity supply and demand close to real time. It is needed because the vast majority of electricity generated cannot be stored and therefore must be manufactured at the time of demand.

The Balancing Mechanism is used to balance supply and demand in 48 half hour trading periods each day, with companies trading in the purchase and sale of electricity on demand.

Where National Grid predicts that there will be a discrepancy between the amount of electricity produced and that which will be in demand during a certain time period, the system operator may accept a ‘bid’ or ‘offer’ to either increase or decrease generation.

National Grid ESO’s Wider Access programme, launched in 2018, is opening up the Balancing Mechanism to attract new market entrants including aggregators known as Virtual Lead Parties, stimulating the required flexibility.

These aggregators can purchase electricity from much smaller generating assets, for example small wind farms or solar plants, which can now be stored in new battery energy storage systems able to respond almost instantaneously to demand from the Balancing Mechanism - unlike large power stations.

Sedgefield-based energy software as a service (SaaS) specialist Quorum has played a key role in the electricity market for nearly 20 years, supporting both global energy players and new market entrants.

Its developers and engineers create and instal the software systems needed by electricity generators, aggregators and traders to participate in the hugely competitive £1.1bn Balancing Mechanism market.

This includes electronic data transfer (EDT) and electronic dispatch logging (EDL) interfaces with Elexon which can accept instructions from the National Grid and automatically deploy groups of generating assets, known as Balancing Mechanism Units (BMUs).

Quorum also provides systems designed to support trading desks operating in the day-ahead and in-day energy trading markets, tracking costs, calculating trading prices, monitoring exchanges and recommending buy and sell orders.

Working in such a dynamic industry sector demands ongoing product development. A recent example is a new software module – the Battery Operational Planner – which forecasts the state of charge for batteries, one of the emerging assets providing balancing services.

Overall, Quorum supports more than 28GW of electricity generation and flexibility in the thermal, renewable, industrial and commercial, and storage sectors of the market – enough to power 21,000,000 homes per year.

Next time you switch on your lights, think about the huge operation going on behind the scenes!