National Grid launches tender for UK energy capacity next winter

LONDON (Reuters) - National Grid opened its first tender round on Tuesday for energy capacity reserve in Britain for next winter in a scheme which pays companies not to use electricity at peak hours. In the so-called Demand Side Balancing Reserve (DSBR), companies sign up to reduce their energy demand on winter weekday evenings in return for payment so power can be diverted to households. In the first tender round, National Grid said it is seeking up to 900 megawatts (MW) of capacity reserve for next winter. A second round will be launched next spring, with the aim of securing another 900 MW of reserve. "This service would only be used in extreme circumstances, in the very unlikely event that there is insufficient generation available to meet demand," National Grid said in a statement. Britain already faces an electricity crisis this winter after several power plants in the country were hit by unexpected outages, which has forced National Grid to take precautionary measures. Last month, British companies operating at 431 sites in Britain won contracts under the DSBR for this winter, which could save up to 319 MW of capacity -- around half the capacity of a typical power plant in Britain -- during peak times. The grid operator has also announced a scheme to encourage utilities to make idle capacity available this winter, something it had not planned to do until next year. A tender for that for next winter will be launched in the coming weeks, National Grid said. (Reporting by Nina Chestney, editing by David Evans)