GB balancing cost £242m in August, £24m under NESO's own benchmark

Victoria Shinder03 October 2026, 12:542 min read

Balancing Great Britain's electricity system cost £242m in August 2026, according to the monthly balancing cost report from the National Energy System Operator (NESO). That is £24m, or about 9%, below the benchmark of £266m that NESO sets for the month.

Constraints drove the fall. Constraint costs were £54m lower than in July. In Scotland, less wind had to be curtailed, which cut constraint costs there by £22.9m. In England and Wales, constraint costs fell by about £19m, mostly because NESO spent less on voltage control. July's very high output from embedded solar had pushed daytime transmission demand down and forced NESO to pay synchronous generators to run for voltage and inertia; in August that effect eased, so voltage costs were roughly half July's and inertia costs fell by 65%.

The year-on-year comparison is less flattering. Against August 2025, the volume of constraint actions fell by 317 GWh, but higher gas prices meant the cost dropped by only £4.5m, or 2.6%. Costs outside constraints fell to £74m from £79m in July, as lower spending on response, reserve and restoration outweighed a small rise in reactive power. The clearing price of the Dynamic Regulation frequency service fell to £1.73/MWh, its lowest since March 2025.

Weather split the country. Wind output was about 4 TWh, similar to July, but unsettled weather in the north brought curtailment and thermal constraints in Scotland while high pressure in the south kept wind low and margins tight. The two most expensive days were 7 and 8 August, at £19.5m and £19.2m; no other day exceeded £15m.

On the evening of 11 August NESO issued an Electricity Margin Notice for 17:00–22:00 on 12 August, the day of the solar eclipse, because solar output was expected to fall away earlier than usual before the evening peak. The notice was narrowed to 18:00–20:00 the next morning and withdrawn shortly before 1pm. Balancing on the 12th cost £10.6m.

Gas set the price of balancing up. Gas at the National Balancing Point rose through the month from 141.23p to 164p per therm, with a step up around 10–11 August that the report links to an extended partial outage at Norway's Ormen Lange field and fewer tanker transits through the Strait of Hormuz. Gas-fired plants accounted for 63% of the volume NESO bought up and 22% of the volume it bought down, both the highest shares of the year, while wind's share of bids fell to 33%, its lowest. The average price of offers rose from £173.94/MWh in July to £193.77/MWh.

Why it matters

The report shows how GB balancing costs now move with two things NESO does not control: where the wind blows relative to the network, and the gas price. Less curtailment saved money in August, but each action NESO did take was dearer, and gas plant was the marginal tool more often than at any point this year.