The National Grid has been struggling with demand this winter and there have been warnings that the Grid’s capacity to supply electricity will be at a seven-year low due to power station closures and breakdowns such as the fire at Didcot B last year. Spare electricity is due to be about 4% this year, down from the 5% it was last year, and the 17% it was three years ago. Now there is a much stronger emphasis on going green to preserve energy, though this can come at a price. Critical power specialist, Powertecnique and electricity demand management company, KiWi Power, have teamed up to offer customers the opportunity to be paid to be green through the National Grid Demand Response programmes. The programmes offer organisations new and recurring revenue streams for temporarily reducing their demand and/or supplying generated utility back to the grid during peak periods or when reliability of the Grid’s supply may be threatened.
Sales and marketing director at Powertecnique, Peter Chai-Tsai, explains: “The National Grid is encouraging businesses to both turn down electricity consumption where possible and export power back into the grid by turning on generators for a maximum of a couple of hours at critical times to reduce overall grid loading. Yet this needn’t be a cost to businesses; it is something from which they can make money. Businesses with standby generators or critical power equipment are encouraged to get involved.”
How it works
Demand Response helps relieve stress from the National Grid during times of peak energy demand such as during large TV audience events or extreme weather. Together with The National Grid, KiWi Power pays companies to participate as it is more cost effective and cleaner than paying for older power stations to handle peaks in demand. There is no minimum size but companies with a generator over 400kVA can benefit significantly from participation in a demand response programme. The generator system can also be programmed to operate in a “Peak Lopping” mode to avoid the client going over any pre-set agreed maximum demand which could incur additional charges from the electricity supplier.
Alastair Newens, business development manager at KiWi Power, explains: “KiWi is the UK’s leading demand response aggregator, meaning we are awarded programme contracts from the National Grid and engage organisations who want to participate in these demand response programmes, e.g. STOR (Short Term Operating Reserve). At the moment, we have 100s of MWs under management through a network of customers assigned to programmes through KiWi. As the demand on power is going up year by year, the need for alternative sources of energy and management of existing usage is becoming more prevalent. The electricity transmission and distribution grid is becoming more complex to manage and balance. This is brought on by the increase of connections to renewable sources providing intermittent power, and the introduction of electricity loads from new transport alternatives (such as electric vehicles) and heating to the system.
“During some peak periods (roughly 30 times a year, for one hour at a time), The National Grid calls KiWi to request they engage their programme participants to turn down, switch off non-essential loads and where possible, turn on generators to export power back to the grid using their assets. The National Grid requires a fast response to the different programmes and because of this, KiWi has processes in place to enable us, when necessary, to remotely switch on generators via GSM modem box, subject to prior consent from the client.
“Our customers are paid for both being available and for the power they supply back to the Grid. The amount that a company is paid varies on the programme type, the size of generator and load supplying the Grid. KiWi has secured the best and most competitive capacity programme prices in the core demand response markets for 2015 and 2016. For example, if you have a particularly large generator feeding back to the Grid, you could receive up to £50k a year.
“Our clients enjoy the revenues generated for them, but the benefits extend beyond this. Companies have the chance to ensure generator assets are kept in operational readiness, carbon offset benefit and the wider sustainability benefits. For example, our most power sensitive sites such as hospitals recognise the dual benefit of switching from The National Grid to their back-up generators when the network is under stress. This prevents a break in supply from a possible outage, protecting the interest of their patients and operational efficiency – staying ahead of the game.”
Keeping clean
As well as enjoying additional revenue streams from running your own equipment, there are small tax breaks on carbon usage as running a genset is far cleaner than taking power from the grid.
The CCL (Climate Change Levy) is an additional tax for the use of non-renewable energy that public sector organisations pay directly through their energy bills; the aim is to encourage energy efficiency and reduce greenhouse gas emissions. The amount of tax directly correlates with the amount of energy that is used so if the organisation can reduce its energy consumption, it pays a lower CCL.
How to get involved
To get involved with the Demand Response programmes, you will need to firstly discuss your site with Powertecnique to establish provisional feasibility. Once this has been completed an ENA (Energy Networks Association) application is submitted to the DNO (District Network Operator) who will confirm whether export power will be allowed in this instance. Companies can then benefit from the programme once the synchronisation control system is working and all relevant parties have witness tested the G59 protection on site.
Even if export power is not allowed on your particular section of the grid, the generator can always be engaged to “Load Follow” decreasing or removing altogether your energy consumption at the required periods for STOR and Triad periods. Triad periods are proportional to the client’s electricity demand at the three highest national half-hour peaks in any winter (November to February inclusive), and if a client can reduce demand during these peaks, they will reduce their Triad charges proportionally – on average £30,000/MW.
Installation
Peter Chai-Tsai continues, “Once your equipment has been approved for export power, it is important to ensure that the technical components are there to make sure it can safely run in synchronisation to the grid. Our engineers can install G59 relays, synchronisation controllers, neutral earth contactors, additional cabling and switchgear as required. During this process, we are also able to provide companies with a temporary generator so that there is no unnecessary downtime to your business while the components are being installed.
“Since retrofitting can be a large upfront cost, we urge contractors and consultants working on new projects to specify synchronised systems with G59 relays and associated switchgear to be incorporated in the design from day one, even if exporting back to the grid isn’t a priority right away. While this can be a significant capital outlay, the cost of a retrofit can be much more expensive. Companies can start enjoying revenue streams from the grid immediately, whereas retrofit repayments will typically arrive in year two.”
Remote monitoring
Chai-Tsai adds, “We recommend that companies in this situation also take out fuel contracts with a remote monitoring package to monitor fuel usages and ensure there is always sufficient fuel in the tank for the generator at any one time. With demand response requiring around five hours of power back to the grid each month, it’s important to have a suitable capacity tank to suit this scheme and your business power protection needs.”
Powertecnique supplies a fuel contract with PowerVue, its remote monitoring service, to ensure that fuel can be automatically topped up by engineers when running low.
Maintenance savings and increased availability
Chai-Tsai continues, “Involvement in Demand Response also saves on expensive and disruptive load bank testing as running the generators at the their full rated capacity has the same life extending benefits of a full load test; regularly burning diesel avoids the need for “fuel polishing” of old or stagnant fuel. Running for an average of 30 hours per year will not reduce the expected system life.
“Many large businesses have generators sat idly in standby mode, often in an N+N configuration. The Demand Response programme is great for getting those sets running and at the same time generating a revenue stream. It really is one of those rare win-win situations.”
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