The UK spent more than £561 million ($753 million) to balance the power grid in October, as soaring gas prices and bottlenecks in the country's aging network pushed up the cost of keeping the lights on. The record bill highlights an increasingly expensive flaw in Britain's energy transition. The nation is adding wind capacity faster than the grid can move the power to where it's needed. At times, the system operator is forced to both pay wind parks to turn off if it's too windy and gas plants nearer to big cities to turn on instead.
October was the second straight month of record balancing costs, with the total for this autumn soaring above £1 billion, according to data from grid operator National Energy System Operator compiled by Bloomberg. The cost for 2026 overall could near £4 billion based on forecasts published by NESO. "It's been windy and we haven't seriously increased transmission capacity and the cost of replacement energy has gone up because of the gas price," said Lisa Waters, director at energy consultant Waters Wye Associates. "Transmission investment to increase capacity hasn't kept pace with the quantity of wind connecting to the system."
Britain is being squeezed on two fronts. Natural gas prices have surged to their highest since the 2022 energy crisis, making it more expensive for the market operator to call on gas-fired plants when it needs additional generation. At the same time, outages and constraints at key points in the transmission grid have limited the amount of electricity that can flow from wind parks in Scotland and northern England to areas further south where demand is much higher. One key issue is the so-called GMSNOW boundary near Liverpool that operated at as little as 14% of its capacity from late September into early October.
That inefficiency is becoming a political headache. While the government has vowed that a boom in renewables is key to freeing the country from expensive, imported natural gas, its leaders are increasingly aware of the costly limits of the country's grid. Chancellor John Healey vowed that in an upcoming government auction to support new renewable power projects they will only back projects that lower bills. "There's no sense building power that can't connect and then paying to switch it off," Healey wrote in The Times newspaper.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing