- Consumers foot bill for the spiralling cost of matching electricity supply and demand with numbers expected to rise
- High costs shows urgent need for new price-predictable, baseload nuclear to cut reliance on expensive gas
The cost of balancing Britain’s electricity grid has more than doubled to £11.8 billon since the start of the energy crisis, according to Nuclear Industry Association analysis of data from the National Energy System Operator (NESO).
The figure accounts for total balancing costs from September 2021 through April 2025, and is twice as high as the £5.08 billion consumers paid in the 41 months from April 2018 through August 2021.
Since electricity cannot be stored at scale, National Grid must pay to either bring on or turn off electricity generation to keep supply and demand in balance at all times. The more unpredictable sources of generation are, the more expensive the task becomes. Energy UK projects that balancing costs could double by 2030.
High balancing costs are linked to Britain’s reliance on carbon intensive gas, which sets the UK day-ahead power price 97% of the time – the highest in Europe. This is because Britain relies on gas to fill the gaps in generation due to a lack of alternative firm sources of power like nuclear.
This winter saw balancing costs hit £1.02 billion, a 22% year-on-year increase and the highest in two years. That is in part due to high levels of gas generation, which reached a winter peak of 29.7 gigawatts on January 22 this year, with renewable output less than 0.3 gigawatts at times. That day saw the highest average day-ahead power price since December 2022 of £261.22 per megawatt hour.
Tom Greatrex, Chief Executive of the Nuclear Industry Association, said:
“The Government is absolutely right to press on with Sizewell C and a fleet of SMRs to get more reliable power on the grid and contain ballooning system costs. Consumers are paying the price of Britain’s reliance on gas after decades of not investing in nuclear, the only available source of homegrown firm, clean power. More nuclear means a more price-predictable, more secure and cleaner energy system so it’s vital that we commit to new projects.”
ENDS
Notes to editors
- NESO publish monthly balancing costs here: https://www.neso.energy/industry-information/balancing-costs & https://www.neso.energy/what-we-do/systems-operations/operational-transparency-forum
- Energy UK says the cost of paying power stations to turn their production up and down will increase from £2.4 billion in 2023/24 to an estimated £4.7 billion in 2030: Page 11, https://www.energy-uk.org.uk/wp-content/uploads/2025/03/Energy-UK-Report-How-to-cut-bills-March-2025.pdf
- France’s day-ahead power price is set by gas 7% of the time and Sweden 1% of the time due to its high nuclear and low-carbon power output: https://pure.iiasa.ac.at/id/eprint/19109/1/1-s2.0-S2352484723013057-main.pdf
- Day-ahead auction prices are available from Nord Pool: https://data.nordpoolgroup.com/auction/n2ex/prices?deliveryDate=2025-03-19¤cy=GBP&aggregation=DeliveryPeriod&deliveryAreas=UK
- The UK has nine reactors across five nuclear sites providing around 14% of the country’s electricity from 5.9 GW of capacity. Of the current fleet only Sizewell B will be in operation after March 2030. Hinkley Point C is due to come online by the end of the decade.
About the NIA
As the trade association for the civil nuclear industry in the UK, the Nuclear Industry Association represents 300 companies across the UK’s nuclear supply chain.
Links
Visit our website: https://www.niauk.org/
Follow the NIA on X @NIAUK and LinkedIn
For further information, please contact:
Iolo James
Head of Communications
[email protected]g
+447517108023
