SBR Winter 2015/16 - Tender Round 2
Market Information
24th June 2015
Peter Bingham – National Grid
Volume Requirement for SBR and DSBR
National Grid has identified a requirement for 2.5GW of Supplemental Balancing Reserve
(SBR) and Demand Side Balancing Reserve (DSBR) for winter 2015/16 to support security of
supply. This was determined in accordance with the recently updated and approved Volume
Requirements Methodology1 using our 2015 Future Energy Scenarios (FES) and a range of
sensitivities approved by Ofgem2.
This has increased from the original 1.8GW requirement due to recent notifications from
some generators of reductions in capacity. Detail on the impact of this additional reserve on
the overall market position for winter 15/16 will be published shortly as part of our Winter
Review and Consultation.
SBR and DSBR Tender Round 2
The second SBR tender round for winter 2015/16 closed on 7th May. A total of 20 tenders
were received from 7 companies, representing 11 different power stations offering 5.2GW of
capacity, of which 3.6GW is not currently available in the market. This report provides more
detail of the results from this tender.
A separate market information report on the recent DSBR tender will be issued once the
validation process regarding these tenders has been completed.
SBR Tender Assessment
In accordance with the updated and approved SBR Procurement Methodology, tenders were
assessed in unit cost order. Unit costs were derived from each tender as the total cost
(including capability, warming, testing, utilisation, and contract costs) divided by the expected
saving in energy unserved resulting from contracting the tendered unit. The expected saving
in energy unserved takes account of the likelihood of the unit being otherwise available in the
market based on the registered TEC position and the load factor over the previous 12
months.
The following table ranks the compliant tenders in unit cost order. This also includes two
existing SBR contracts which were assessed alongside the new tenders. Two tender
scenarios are not included, as these are lower volumes from the accepted SBR Unit (SBR2).
1
The methodologies can be found on our website at http://www2.nationalgrid.com/UK/Services/Balancing-services/Systemsecurity/Contingency-balancing-reserve/Methodologies/
2
“Decision to approve the sensitivities proposed by NGET in accordance with volume requirement methodology for tender
round two of SBR and DSBR”, Ofgem, 3rd June 2015.
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SBR Winter 2015/16 – Tender Round 2 Results
Tender ID
Capability
Offered
Tender
Accept/Reject
Code
Capability Price1
(£/kW)
Assessed Unit
Cost2 (£/kWh)
SBR 1
B
TA
10.6
1.0
SBR 2
C
TA
10.0
1.4
SBR 3
A
TA
12.9
2.5
SBR 4
B
TA
13.7
2.5
SBR 5
A
TA
15.6
3.2
SBR 6
C
TRV
10.3
3.5
SBR 7
A
TA
16.0
3.7
SBR 8
A
TA
16.0
3.7
SBR 9
A
TA
17.0
3.9
SBR 10
A
TA
17.0
4.0
SBR 11
C
TRV
14.4
4.2
SBR 12
B
TA
19.8
4.5
SBR 13
B
TA
18.9
4.7
SBR 14
C
TRP
17.2
5.8
SBR 15
B
TRP
24.7
7.0
SBR 16
C
TRP
23.2
7.8
SBR 17
C
TRP
21.0
8.7
SBR 18
C
TRP
29.4
9.7
SBR 19
B
TRP
24.2
9.9
SBR 20
C
TRP
18.9
31.8
Notes
1
Tendered capability price plus estimated costs for proving tests divided by the volume of capability
offered de-rated by the tendered reliability factor.
2
Unit cost (including warming and utilisation costs) assessed in accordance with the approved SBR
Procurement Methodology, with compliant tenders accepted in ascending unit cost order to meet
the volume requirement.
Offered Capability: A = 0 to 100MW, B = 101MW to 500MW, C= 501MW to 1,000MW
Tender Accept/Reject Codes: TA = Tender Accepted,
TRV = Tender Rejected on Volume
TRP = Tender Rejected on Price
In general, compliant SBR tenders were accepted in unit cost order to meet the identified
volume requirement at least cost. However, although SBR6 and SBR 11 offered a lower unit
cost than some of the tenders accepted - accepting either of these tenders would have
exceeded the identified volume requirement and breached the volume cap. Hence these
were rejected in favour of smaller units at a higher unit cost. This is permitted by the
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methodology, allowing the volume requirement to be met at least cost without breaching the
volume cap.
Proposed SBR Contract Awards
Following this assessment, SBR contracts are being offered for a total volume of 1,784MW to
the following Power Stations:
Owner
De-Rated
Capability (MW)
SSE
675
Centrica
660
GdF Suez
250
Uskmouth Power
90
Fiddlers Ferry GTs (2 x 17MW )
SSE
32
Ferrybridge GTs (2 x 16MW)
SSE
30
Rugeley GT (1 x 25MW )
GdF Suez
25
Keadby GT (1 x 23MW)
SSE
22
Unit
Peterhead CCGT (2 x 375MW)
Killingholme CCGT (1 x 660MW)
Deeside CCGT (Additional 250MW)
Uskmouth (1 x 100MW Coal Unit)
Total
1,784
The procurement cost of this plant (including testing) is forecast at £23.1m, giving an
equivalent unit cost of £12.95/kW. Competition for service provision has seen this reduced
from £17.80/kW in the first tender round, reflecting the economic and efficient procurement of
the service in delivering value for money to consumers. Additional costs will be incurred if this
service is used.
Latest SBR and DSBR Position for Winter 2015/16
The overall procurement position for Winter 2015/16 is as follows:
Total
Capability
(MW)
De-Rated
Capability
(MW)
Cost (£m)
DSBR Round 1
215*
65
1.7
SBR Round 1
600*
600
10.8
DSBR Round 2
300†
112
1.7
SBR Round 2
1,874
1,784
23.1
Total
2,989
2,561
37.3
Tender

Costs include setup fees, admin fees and testing costs for DSBR, capability and testing costs for SBR.
DSBR reduced from 242MW following validation, SBR reduced by 20MW following Centrica’s decision to reduce
the maximum output at South Humber Bank.
†
DSBR volume in Tender Round 2 subject to validation checks.
*
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Contract Parameters
This table provides the operational data associated with each proposed SBR unit from the second tender round, including reliability factors,
maximum notice periods, ramping times, BM start-up/standby prices and utilisation rates.
Killingholme
(Centrica)
Peterhead
(SSE)
Deeside
(GdF Suez)
Uskmouth
U13
Fiddlers
Ferry GTs
(SSE)
Ferrybridge
GTs (SSE)
Rugeley GTs
(GdF Suez)
Keadby GT
(SSE)
Contracted SBR
Capability
1 x 660MW
CCGT
2 x 375MW GTs
Additional
250MW CCGT
1 x 100MW
Coal Unit
2 x 17MW
2 x 16MW
1 x 25MW
1 x 23MW
Minimum
Despatchable
Volume (SEL)
360 MW
249 MW
360MW
70 MW
17 MW
16 MW
10 MW
23 MW
Reliability Factor
1.0
0.95 & 0.85
1.0
0.9
0.95
0.95
1.0
0.95
Maximum Notice
Period (NDZ)
240 minutes
220 minutes
89 minutes*
320 minutes
30 minutes
30 minutes
10 minutes
30 minutes
Minimum NonZero Time (MNZT)
360 minutes
240 minutes
141 minutes
300 minutes
60 minutes
60 minutes
30 minutes
60 minutes
Max Run up Time
208 minutes
130 minutes
56 minutes*
107 minutes
1 minute
1 minute
3 minutes
7 minutes
22 minutes
41 minutes
13 minutes
17 minutes
1 minute
1 minute
1 minute
7 minutes
240 minutes
240 minutes
Utilisation Price
£200/MWh
£65/MWh +
Gas Cost +
Carbon Cost
£550/MWh
£550/MWh
£500/MWh
£150/MWh +
Gas Cost +
Carbon Cost
BM Start Up Price
£1,000/hour
£1,200/hour
£2,700/hour
Hot Standby Price
£1,000/hour
£1,200/hour
£2,700/hour
Min Run Down
Time
Maximum Hot
Standby Period
120 minutes
£225/MWh
£100/MWh
* While the main plant is operating at 260MW, allowing the additional 250MW of SBR despatched in BM timescales.
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