Energy Grid
The power grid has one main rule: supply must always match demand. In the days of coal-fired power stations, that was easy enough. Need more energy? Fire up. Need less? Power down. Today, with growing reliance on intermittent renewable energy, that balancing act is much harder. The sun doesn’t always shine, the wind doesn’t always blow, and during storms or long spells of sunshine, we can end up with more power than we can use.
In the UK, the grid must maintain a stable frequency of 50 Hz, which is managed by the National Electricity System Operator (NESO). If the frequency drops too low or rises too high, the consequences can be detrimental. Take the blackouts in Spain and Portugal earlier this year triggered by frequency levels slipping below this critical level.
To keep the system stable, NESO has a variety of balancing mechanisms:
- Import or export power from and to neighbouring grids
- Pay gas plants to ramp up quickly when demand spikes
- Curtail renewable generation by paying generators to switch off when supply exceeds what the grid can handle
- Encourage consumers to use less energy during peak hours and more during off-peak times
- Pay for ancillary services, meaning reserve power kept on standby
Each of these measures comes at a cost. Take curtailment, for example, where generators are paid not to produce electricity. According to Octopus Energy, Seagreen, Scotland’s largest wind farm, received £65 million last year to limit its output 71% of the time. When curtailment is combined with other balancing mechanisms, the total cost is staggering. Between January and September 2025, Britain spent about £2.1 billion balancing its electricity grid. NESO warns this could rise to nearly £8 billion annually by 2030 if nothing changes, with the expense ultimately passed on to consumers.
These balancing mechanisms are, of course, necessary to keep the lights on, but they are reactive, responding to problems after they occur. The real opportunity lies in making the grid more predictable and flexible, with innovations in forecasting, storage, and nuclear reducing uncertainty and cutting the need for last-minute fixes that drive costs up.
AI Weather Forecasting
Weather forecasting has long relied on supercomputers. In Europe, the European Centre for Medium-Range Weather Forecasts (ECMWF) leads this work. But AI is changing that. Instead of solving millions of complex equations, AI models trained on vast datasets from weather stations and satellites can produce faster, more accurate forecasts with far less computing power. Start-ups like Jua are already outperforming traditional models in terms of accuracy and long term prediction.
For grid operators, the impact is huge. More accurate forecasts mean better predictions of renewable output, smarter trading decisions, and fewer costly system imbalances. Quartz Solar, for example, an AI-powered solar forecasting tool, has shown that improved solar forecasting can save around £30 million per year in imbalance costs, directly reducing the need for expensive balancing actions.
Nuclear Power
When renewable output falls, gas plants are brought online to meet demand. Under the UK’s marginal pricing system, the most expensive generator required to meet demand sets the market price, so gas often determines the overall cost of electricity.Nuclear could change that.
Modern nuclear power brings us back to the predictability of the coal era without the emissions. It provides a steady, low-carbon baseload supply that keeps prices stable and reduces the need to rely on volatile fossil fuel markets. With projects such as Sizewell C and small modular reactors under development, nuclear could soon provide the consistency the grid needs to operate more efficiently and affordably.
Battery Energy Storage Systems (BESS)
At the moment, most electricity has to be used as soon as it’s generated. BESS changes that. When there is excess renewable power, it can be stored and released later when demand is higher. These systems also connect to form virtual power plants (VPPs), networks of batteries that act collectively to stabilise the grid. Even smaller energy storage systems, like those in electric vehicles, can contribute. Through vehicle-to-grid (V2G) technology, cars plugged into bidirectional chargers can feed power back into the grid during shortages and recharge when supply is abundant. Together, these innovations help flatten demand peaks, reduce curtailment, and reduce balancing costs.
Innovation paves the way
Balancing the grid is one of the biggest and least visible challenges in the energy transition. Right now, the billions we spend doing it are really the price of inefficiency, and that money doesn’t even create jobs or deliver long-term value. But with smarter weather forecasting, dependable nuclear power, and scalable energy storage, we can make balancing costs the exception, not the rule.
