LONDON (Reuters) - Britain's power grid operator National Grid (NG.L) has cancelled a tender in which companies vie to be paid not to use electricity at peak times in the coming winter so power can be diverted to households, citing a lack of willing participants.
The so-called Demand Side Balancing Reserve (DSBR) scheme was introduced in response to tighter winter power supply after weak electricity prices led to several power plant closures in recent years, compounded by stricter environmental regulation requiring coal plants to close by 2025.
The scheme is one of a number of measures to secure reserves for times of emergency and invited heavy electricity users such as hospitals and factories to volunteer to reduce demand on winter evenings by reducing their load.
However, in a letter to industry on Monday, National Grid said it would not be procuring DSBR for winter 2016/17.
"Despite National Grid amending the DSBR service via a consultation in September 2015 to encourage participation over the peak, it is clear this has not been successful," it said in the letter published on its website.
National Grid can procure extra generation capacity through a separate scheme that pays power plants to be available on standby.
Reporting by Nina Chestney; Editing by David Goodman