National Grid routinely purchases electricity through the balancing mechanism to ensure supply and demand balance precisely minute-by-minute. National Grid is also able to contract forward to ensure the availability of capacity which can provide these balancing services, for example, through the Short Term Operating Reserve (STOR); and for the provision of other ancillary services required to meet the physical needs of the system, although these services are often provided by capacity which is also participating in the energy market. These will still be available to Grid after the Capacity Market begins operation and some of the services will be available through plant participating in the capacity market.
During 2014/15, 2015/16 and 2016/17, ahead of the introduction of the capacity market, National Grid has also been allowed by Ofgem to procure capacity into the Supplementary Balancing Reserve (generation) and Demand-side Balancing Reserve. National Grid has already procured 3.6GW for next winter which ensures we will have an adequate capacity margin. Once the capacity market begins operation in 2017/18, Ofgem have stated that they will discontinue this facility.