What is national grid?

How do national grid forecast demand acturately

• How do national grid forecast demand acturately? How do national grid forecast demand acturately? I know they look at the weather and history/patterns. But does anyone know more precisely how they do it, from day to day and year to year?

• Answer:

  I don't think it works quite like that, certainly not in the UK anyway. It's up to the supply companies (i.e. companies that buy electricity from generators and sell it to consumers) to agree contracts for sufficient power to meet the demands of their customers at any given time. This is carried out through bilateral contacts between generators and suppliers; if either fails to deliver - either supply or demand - when they have agreed to do so they will then be the one which bears any additonal system costs. The main costs will be if the supply company underestimates the demand of their consumers in any given period or if the generators can't deliver as agreed. National Grid has the responsbility for 'balancing' the system, and for ensuring supply = demand, to meet the unexpected demand (either additional or unmet) National Grid will go to a secondary electricity market (the balancing market), which consists of generators catering specifically to that market, they will generate less often than generators catering to the open market but will get paid more per unit. There is a 'gate', which from memory is one hour in the UK, this is the minimum notice that the generator and supplier can give National Grid as to what their arrangements are, if they can't sort out arrangements before this period, or their is some problem after the gate has closed then National Grid sorts it out via the balancing market. As I say, the additonal costs of meeting this demand are passed on (i) to the supply company who underestimated the demand of their customers, effectively the supply company bears the risk of estimating demand and of having in place sufficient contracts to meet that demand. The idea is that whichever supply company is best at managing that risk will have a competitive advantage in the marketplace. (ii) to a generator who fails to deliver (for example, if the plant has to shut down unexpectedly), then it is they who must pay the additional costs if National Grid has to go to the balancing market. Again, the economic argument is that the generator with the least costs should be able to capture more of the market. The regulatory regime relevant to balancing is important in relation to the intermittent renewable energy sources, e.g. wind, wave, tidal, PV. Effectively if generators can't deliver when they have contracted to do so then they will bear costs. Because output will be intermittent in comparison with sources of 'firm' generation then National Grid is more likely to have to go to the balancing market and renewable energy generators are more likely to bear additional costs. This is a key reason why the RE sectors (especially wind) have been trying to improve predictability of weather conditions in order to improve predictability of output. The length of the gate can also have a signficiant impact on the costs associated with intermittent generation, since a shorter gate requires less prediction ahead. There may also be problems with the additional balancing costs for renewables not actually reflecting the actual costs, with specific impacts on comparative costs for renewable energy generators. There is a third market for electricity generators, ancillary services, which isn't really relevant to the balancing market, but exists to provide additional services to the grid, such as 'black start', voltage control, etc.