Winter Outlook Report 2017/18 – The Highlights

Take a look at the power and gas highlights from National Grid’s Winter Outlook Report 2017/18

Background

The Winter Outlook Report is an annual publication from National Grid which presents their assessment of the security of supply for gas and electricity over the coming winter months. We’ve reviewed the report and are able to provide you with both electricity and gas highlights for this winter.

Electricity Highlights

We’re now in the first operational year of the Capacity Market (CM), developed by the Government as part of the Electricity Market Reform programme to improve the security of Great Britain’s electricity supply. This allows access to a predetermined mechanism during times of system stress which was not available last year.

The margin between supply and demand going into winter 17/18 has been calculated at 6.2GW (10.3%), which is higher than last year. It’s worth mentioning, though, that the way the margin has been calculated has changed this year – now National Grid will use the total demand on the transmission and distribution systems. This is due to the amount of embedded generation now playing a larger role.

 

The depicted graph is taken from National Grid’s Winter Outlook Report and shows the different supply and demand scenarios forecasted for this winter.

The vertical bars represent demand and the horizontal lines represent supply. The light blue of the bars represents forecasted peak demand with the dark blue representing the reserve National Grid like to have. The three line graphs represent supply in the scenarios of high (yellow), base (red) and low (orange) generation from the interconnectors. The dotted navy line in the middle represents the average demand during a ‘cold spell’ – showing that a bout of especially cold weather could see demand increase to around the 53GW mark.

National Grid is more comfortable that demand this winter will be met than the ‘worst case scenario’ from last year predicted. This is thanks to an estimated fall in demand this winter, coupled with the first full operational year of the Capacity Market.

During times of system stress National Grid will release notices to ensure the market is aware of the circumstances  The first is an electricity market notice, usually issued within 24hrs of the suspected period of tightness but can be issued at any time. The second is a capacity market notice. National Grid will look at forecast demand on the transmission system against that declared by generators and calculates any potential shortfall. If there’s a heightened risk of a national shortage National Grid will release this automated notice.

Gas Highlights

Based on what National Grid term seasonal normal conditions gas demand for this winter is expected to be less than the weather corrected demand for last year. Weather corrected demand is the demand calculated with the impact of the weather removed, also known as ‘underlying demand’.

The above graph is a visual representation of this, showing what National Grid reasonably expect to occur this winter under average conditions. Also present is the difference warm and cold weather conditions can have on demand, irrespective of other elements such as power generation economics.

National Grid’s headline message is that there will be sufficient gas to meet demand this winter.

The graph below represents a 1 in 20 peak demand and shows that National Grid expect there to be a margin of 116 million cubic meters per day. A 1-in-20 peak demand is the “level of demand that, in a long series of winters, with connected load held at levels appropriate to the winter in question, would be exceeded in one out of 20 winters, with each winter counted only once”.