Balancing costs set to reduce nearly by £100m

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Forecasts suggest that the total balancing costs, which amounted to £1,413 million in 2023 are likely to decrease to approximately £1,319 million this year.

That’s according to the latest report by National Grid ESO, which suggests the balancing costs for summer 2024 are expected to decrease compared to those incurred in summer 2023, despite an anticipated increase in the volume of balancing actions.

This increase in actions is likely to be offset by falling wholesale prices, which have significantly dropped compared to previous years.

The decline in electricity prices is attributed to reduced pressure on global gas supplies and the high availability of French nuclear energy.

This trend aligns more closely with prices observed in summer 2021, around £55/MWh, indicating a potential cost saving opportunity for energy system operators.

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