The cost of the UK’s Balancing Mechanism has soared by almost 300% compared to last year, according to new analysis.
Consultancy LCP said that in the three months to the end of November, costs reached £967m, compared to the £337m seen in the same period in 2020.
Analysis also reveals that the top 10 most expensive days in the mechanism have occurred over the past three months.
For November alone, the average daily cost was £16.4m, an increase of 192% from 2020 and 756% from 2019.
Rajiv Gogna, Partner at LCP Energy Analytics, said: “We have seen the perfect storm of low renewable generation and an increase in global demand for gas which has put the UK’s limited capacity on the edge, forcing prices to repeatedly break new ground.
“This has resulted in record high balancing costs, which will feed through to suppliers via BSUoS charges at the worst time. With no mechanism to pass the increased cost onto customers, suppliers have had to tackle this huge cost increase from their already stretched balance sheets.”