NESO publishes outlook for the Winter ahead

NESO has today published its annual Winter Outlook report for 2024/25.

Margins this winter are expected to be adequate, with the base case de-rated margin forecast to be 5.2GW (representing 8.8% of peak average cold spell demand). 

The expected margin for this winter is higher than last year, which saw a forecast of 4.4GW (7.4%).

It represents the highest forecast since 2019/20 and is broadly in line with recent winters. This assessment for Winter 2024/25 assumes a peak average cold spell demand of 59.8 GW, including operating reserve.

The higher year-on-year margin is driven by new interconnection, growth in battery storage capacity and an increase in generation connected to the distribution networks. This combines to more than offset generation retirements - such as the recent closure of Ratcliffe-on-Soar, the UK’s last coal fired power station - and other temporary capacity reductions.

While NESO’s forecast sets out that we expect sufficient operational surplus throughout the winter period, allowing for natural variation of demand, wind and outages, we may still see some tight days where we need to use our standard operational tools, including the use of system notices.

NESO is confident it can continue to reliably operate a changing electricity system as new technologies, and diverse forms of capacity, contribute to security of supply.

As a prudent system operator, NESO is continually planning and preparing for a wide range of eventualities. We continue to work closely with Government, Ofgem, National Gas and other stakeholders to assess emerging risks and build resilience ahead of this winter, including ongoing active engagement with neighbouring Transmission System Operators across Europe and Transmission Owners across GB.

NESO is continuing to develop tools, systems and services that provide clear and efficient routes for new technologies and all forms of capacity, including small scale flexibility, to contribute to the security of supply.

While in previous years the groundbreaking Demand Flexibility Service (DFS) has been used as an enhanced action, as part of our winter contingency toolkit, it will not perform that function this year. Instead, given the improved operational outlook for this winter DFS has been redesigned to operate in the commercial marketplace to help us manage our margins. Once approved, NESO will be able to use DFS throughout the year, allowing consumers and businesses to compete directly with power stations and renewables. 

Read the NESO Winter Outlook 2024/25

Craig Dyke, director of system operations at NESO, said:

“As we publish our first Winter Outlook as the National Energy System Operator, it is positive to see that margins forecast for this winter are the highest since 2019/20. This is driven by a range of factors such as additional generation, increased storage capacity and new interconnection.

“While our margin assessment has improved from previous winters, we are continuing to monitor risks and uncertainties and, if necessary, will take steps to build resilience.

“We and the rest of the energy industry will as always continue to prepare for a range of potential eventualities, so that we are fully prepared for this coming winter.”