What is the balancing mechanism?

This is one of the tools National Grid uses to balance electricity supply and demand close to real time. It is needed because electricity cannot be stored and must be manufactured at the time of demand. Where National Grid predicts that there will be a discrepancy between the amount of electricity produced and that which will be in demand during a certain time period, they may accept a ‘bid’ or ‘offer’ to either increase or decrease generation (or consumption). The balancing mechanism is used to balance supply and demand in each half hour trading period of every day.