British energy regulator, Ofgem, published its latest assessment of electricity capacity margins. Electricity margins are tightening over the next two winters. However the probability of disconnections has reduced due to measures taken by Ofgem alongside National Grid and government.
Capacity margins are the surplus of electricity generated compared with demand. Margins are still expected to drop to their lowest level in 2015/16 resulting from closure of older power stations. After this, the margins are expected to improve as new power stations are introduced.
National Grid will tender for new contracts with power stations so that they can provide extra reserve power when needed. National Grid will also carry out additional tenders for large businesses which are willing to reduce their power consumption during peak demand times in return for a payment.
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