UK winter power crunch boosts case for on-site power

News that EDF Energy has shut down four reactors at its Heysham 1 and Hartlepool power stations has rather far reaching implications for the UK’s energy supply scenario over the coming winter.

The discovery of a cracking problem in the boiler spine of Heysham 1 prompted the company to suspend operations at the plants with this reactor design while detailed inspections took place. Hartlepool power station was also shut down because both stations share the same design with each of its 16 boilers supported by this boiler spine component. Now EDF Energy has issued a statement noting that repairs to the units will not see them return to service until well into the winter.

EDF Energy says that to bring these reactors back into service, the programme must complete the inspection programme to verify there are no further defects which could develop into cracks and understand in detail the cause of the crack found on the boiler spine at Heysham 1.

The company must then develop detailed designs and techniques for modifications to mitigate the impact of any defects and then implement the required modifications. In its statement, EDF Energy says that, depending on the progress of the programme and any necessary modifications, the company expects there to be a phased return to service between the end of October and the end of December, 2014.

EDF’s update came just days after the UK’s National Grid issued a tender for additional reserve generation capacity to meet expected power demand for the coming winter.

National Grid has decided to exercise its option to tender for Supplemental Balancing Reserve (SBR) – one of two services designed to provide additional reserves for the next few winters – as capacity margins tighten.

According to the company, the move follows a number of recent developments since June 2014, including fires at the Ironbridge and Ferrybridge power stations and a closure announcement regarding Barking power station. National Grid also acknowledges that events at Heysham and Hartlepool may also have an impact.

As a result, National Grid says, there is “an increased level of uncertainly over the volume of plant that may be available in the market this winter”.

Cordi O’Hara, National Grid’s Director of UK Market Operation, said: “This is a sensible precaution to take while the picture for this winter remains uncertain.à‚  At this stage we don’t know if these reserve services will be needed, but they could provide an additional safeguard.”

The second mechanism at National Grid’s disposal is the Demand Side Balancing Reserve (DSBR) service, which will allow large energy users to reduce their demand or run other sources of generation during peak winter periods.à‚ The service will be available for short periods between the peak demand periods of 4:00 and 8:00pm on weekday evenings between November and February.

O’Hara observed: “We have had a very positive response to the DSBR pilot and plan to offer contracts to the successful parties in September. Tendering for Supplemental Balancing Reserve will enable us to see what additional reserves can be provided by generators at a competitive cost”.

Energy intensive industries may perhaps have responded positively to National Grid’s plans to curtail their demand, but there is little evidence so far that the new capacity mechanism ” when it finally emerges – will engender investment in new stand-by or reserve capacity. And, while the proposal suggests that the UK’s grid operator has an expectation that commercial and industrial operators will support a narrowing reserve margin, even more troubling for those energy intensive industries is the fact that a constrained market inevitably means higher energy prices. Those without a large proportion of their energy demand locked down in forward contracts should be concerned that they are extremely vulnerable in the face of price volatility. The solution? On-site power production.

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