When record-breaking heatwaves like Britain has experienced in
recent weeks hit, there is sudden huge, simultaneous demand on
the electricity grid across the country, as people switch on
air-con and newly-bought fans.
Constraint costs arise when there is insufficient network
capacity to transport electricity from where it is generated to
where it is needed. In these situations, the National Energy
System Operator (NESO) balances the system by paying some
generators to reduce output and others to increase generation
elsewhere. These turn up and turn down actions cost money, and
how much depends on the volumes involved.
In the second session of its inquiry on Reviewing the electricity
market, the Committee turns to the growing constraint costs
of managing congestion on Britain's electricity network, and
whether Government reforms will reduce the burden on
consumers.
While some level of network constraint is an unavoidable feature
of an efficient electricity system, evidence submitted to the
Committee suggests current costs are significantly higher than
necessary, with infrastructure investment delivery by
transmission operators 32% below planned levels between 2013 and
2021.
Today, NESO's re-dispatch actions can at times account for more
than 50% of national electricity demand. Congestion management
costs have risen eight-fold since 2010 and are projected to be
adding up to £8bn on consumer bills per year by 2030 unless
critical network projects are brought forward.
Will the Government's Reformed National Pricing plan reduce these
constraint costs?
Or are further operational and market changes needed to improve
how the system is balanced in real time and how costs are
allocated?
On Wednesday 8 July 2026
at 3pm [watch link here]
- Lawrence Slade, Chief Executive at Energy Networks
Association (ENA)
- Rachel Fletcher, Director for Regulation and Economics at
Octopus Energy
- Scott Somerville, Director of External Affairs at E.ON
UK
- Steve , Group Chief Strategy and UK
External Affairs Officer at National Grid
At 10:15am:
- Claire Dykta, Director of Strategy and Policy at NESO
- Matthew Billson, Chief Strategy Officer at Elexon
- Alastair Martin, Chief Strategy Officer at
Flexitricity
