Electricity can’t be stored in large quantities, so part of our role involves balancing the country’s demand and supply of it, minute by minute. We also transport electricity from where it is generated to where it is needed.

Balancing the system to make sure that demand is met by supply is one of the most important things we do, and it is becoming more difficult as intermittent generation – such as that supplied by wind power – becomes a bigger part of the overall energy mix.

• Frequently asked questions about how we balance the electricity transmission network

As we continually work to balance the system, we can ask generators of all kinds – not just wind farms – to come on or off the grid to help us balance supply and demand, or to manage ‘constraints’ – effectively bottlenecks – in the network.

This is something we do many times every day, and have done for many years. It is a normal part of our job, and we have a number of well-proven tools to help us do it, including buying generation onto or off the network one or two days ahead of real time, and bids on the balancing mechanism within one or two hours of when the energy is needed.

Our demand forecasting team is always planning ahead, so we can make sure there is enough back-up power available to cover any potential shortfall, whether that’s due to a power station breakdown or an unexpected event.

For instance, in very high winds, many wind farms will shut down their turbines for their own protection, often automatically. When that happens, we can use our backup generation to balance the system.

Sometimes it works the other way too. In early January 2012, we asked some wind farms in Scotland to stop generating for a few days. This was for two reasons.

First, the very high winds were affecting the transmission network, causing constraints. Also, demand in Scotland was low because of the New Year Bank Holidays, so that additional energy wasn’t needed.

There is a cost in this balancing activity, but it is very low for consumers - no more than a few pence a year on a typical electricity bill. As part of a ‘balancing mechanism’, each power station makes a ‘bid’ that reflects what they are willing to be paid – or to pay – to be taken off or moved on to the network.

Total constraint costs from January to December 2011 for generation of all types were about £250 million.

The overall cost for balancing the network in 2010/11 was £708 million, which makes up around 1 per cent of consumer bills.

Ofgem regulates these balancing costs and gives us incentives to keep them down.

Adapting for the future

We expect that new technology, from smart meters to innovative forms of electricity storage, could offer new opportunities for large and small consumers to help us balance the system.

We also carry out a number of consultations to give the rest of the industry an opportunity to contribute to the debate.