MAKE THE MOST OF ON-SITE ASSETS


As technology-savvy energy managers already know, installing a


CHP plant on site can significantly reduce energy costs. Not only can you reduce the volume of energy imported from National Grid, you can also unlock new revenue streams by exporting additional power back onto the Grid, as Jeff Whittingham, Managing Director, DONG Energy Sales UK explains.


On-site generation assets can offer significant value, as they provide businesses with the flexibility required to participate in demand response schemes. The earning potential from these is great, and the benefit it offers National Grid is also invaluable.


As an increasing amount of variable generation moves online, and ageing fossil fuel plants close, there is a greater requirement for flexibility of use, to keep the energy system balanced, stable and cost effective. National Grid is looking to businesses to reduce or increase its volume when instructed, to match supply and demand when the system is strained.


A number of different flexibility schemes are available, but essentially, there are three ways in which businesses can get involved:


• Temporarily turn consumption up or down during periods of peak demand


• Shift consumption patterns to avoid peak periods, or


• Use on-site generation to either reduce demand from the Grid or make export capacity available when requested


The Association of Decentralised Energy (ADE) predicts that by 2020, up to 16% of the UK’s peak demand could be provided through demand response schemes, equating to 9.8GW. Tapping into the inherent flexibility of industrial, commercial and public sector organisations becomes a more cost-effective way for National Grid to balance peak demand. Yet, whilst the opportunity is great, participation from the industry is not as high as it could be.


18 | CHP


The good news is that a lot of work has already taken place in the field to help overcome these concerns. A plethora of schemes has been created, ensuring that businesses of all sizes can now take advantage of the rewards available. It’s in the industry’s best interests to make flexibility work. As a result, many demand-side schemes no longer have any penalties associated, and there are entry-level versions of some of the more established schemes, like Short Term Operating Reserve (STOR) and Firm Frequency Response (FFR).


HELPING TO CLOSE THE


GENERATION GAP Across the country, around 5.2GW is already available from existing CHP units, almost half of which lie on the premises of industrial and commercial organisations. The ADE calculates that 1.7GW of flexibility is available from commercial and public sector demand. By comparison therefore, it’s clear that CHP plant owners could play an essential role in keeping the system balanced. So what is holding them back?


DONG Energy ran a flexibility workshop with a number of industrial and commercial energy users, to identify the barriers to embracing flexibility. Several key themes emerged, including:


• Lack of clarity over the options available


• Concern over perceived risks of penalties for non-delivery


• Concerns over ease of participation, both contractually and operationally


There is plenty of opportunity to embrace flexibility, without incurring risk. For example, by manipulating consumption to avoid expensive peak periods, businesses can test the practicalities of flexibility as well as enjoying reduced costs.


DONG Energy’s Energy Vision enables businesses to model the impact of shifting consumption patterns, taking into account cost and revenue opportunities to identify true potential cost savings. In addition, schemes such as DONG Energy’s Renewable Balancing Reserve enable businesses to participate in flexibility without penalty or commitment – so a great first step.


In response to customer feedback, we produced a straightforward user guide to help businesses identify the flexibility schemes that are most suited to their needs. It’s designed to provide a complete view of formal demand side schemes, as well as looking at ideas for taking that first step.


www.dongenergy.co.uk www.tomorrowsem.com


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