Energy management company Open Energi estimates that large power users in the UK could make GBP1 billion a year by redirecting unused energy to meet demand elsewhere on the grid.
The savings are based on figures from an ongoing partnership between National Grid and Open Energi’s Dynamic Demand technology, which claims to balance requests from the grid within two seconds.
Supply and demand
Since 2010, the company has aggregated the electricity use of major energy users, such as Sainsbury’s, Aggregate Industries and United Utilities, to help balance the grid and free up capacity.
By turning their equipment into smart devices for balancing supply and demand across the network, UK firms can earn revenues, equal to 5 per cent – 10 per cent of their energy bill, from National Grid, said Open Energi in a statement yesterday.
Nigel Fox, energy demand manager at National Grid, said: “Building in resilience this winter and capitalising on renewable energy, requires a range of balancing techniques; from peaking generation through to demand response.
“Dynamic Demand is a smart innovation that allows fluctuations in supply to be met, almost instantly, by adjusting demand, which helps balance the grid, as well as creating a revenue opportunity for UK industry.”
Currently, the majority of grid balancing is supplied by switching on gas and coal-fired power stations to increase supply, yet managing demand instead can help to maximise the use of existing system capacity.
National Grid’s use of Dynamic Demand uses internet intelligence to increase grid efficiency and reduce its reliance on “peaking power” providers, which cost between GBP15-20/MWh.
In doing so, Open Energi estimates that Dynamic Demand could save National Grid around GBP40 million on peaking generation over the next 10 years.
Additionally, Open Energi forecast that by 2020 demand response could save £1.1 billion by reducing investment in new transmission and generation infrastructure, since every MW provided by Dynamic Demand frees up 2 MW of capacity elsewhere on the system.
In total, Open Energi estimate that the avoidance of grid modernisation, plus peaking power costs, could save £1.12bn by 2020.
Following a successful trial, UK water company United Utilities is now rolling out Dynamic Demand across its whole North West operation, with 10 MW being made available within the next 12 months.
Over the next five years the company expects to have a total of 50 MW of flexible capacity to offer to National Grid – the equivalent of a conventional power station. This will reduce carbon emissions by 100,000 tonnes per year and generate around £5m in revenues.
Andy Pennick, energy manager at United Utilities, said:
“Water and wastewater treatment is a really energy intensive process – power is one of our biggest operating costs. By using Dynamic Demand, we can minimise the environmental and grid impacts of our equipment with zero interruption, whilst simultaneously generating revenue, which can be reinvested into site assets to reduce operating costs.”