Energy Management
On the one hand, you need to understand why they consume energy the way they do in order to see where it is possible to make changes. On the other, they need to know why it’s so important that these new measures are coming in, whether slight or significant. After all, if you don’t have the buy-in and support from your employees, then they will keep doing what they’ve always done, rather than getting on board with – and ensuring others are adopting – new best practices.
The aim should be to increase staff awareness of energy use and help them see the impact excess can have on the organisation as a whole. That means running suitable training, providing appropriate measurement tools and giving detailed information to support responsible energy decisions. There’s a great deal of psychology behind driving true cultural change – so it’s worth taking the time to explain why a behaviour needs altering, rather than just telling staff that there’s a new way to be.
Adopt a flexible purchasing strategy Buying energy effectively requires a targeted risk management and hedging strategy that reflects your business’ risk appetite, budget and energy management priorities. At the same time, any potential for savings – for example on peak charges – and revenue generation should be maximised.
Flexible energy purchasing allows you to take advantage of price changes in the energy market, so you can spread your price risk over a number of purchasing decisions throughout the year. Using the right tools, you can see just how the market and costs are set to change in order to get a heads up on peak and off-peak times in order to buy and sell in the most profitable way. As we move forward into this New Year, it’s going to be important energy managers have
access to this data, helping them to make more strategic decisions around their energy purchasing.
Demand management - DSR Of course, helping the business through turbulent times is not necessarily about finding savings, but also looking at where you can unlock additional revenue. As the energy market evolves and diversifies, a new initiative – demand-side response (DSR) – is getting more attention for its ability to help businesses unearth new revenue opportunities. DSR is an intervention by consumers to flexibly alter consumption patterns in real-time or in response to network operator price signals. It enables businesses to save on import costs as well as generate income by reducing or shifting consumption – or switching to on-site generation – at opportune times. It can also involve increasing consumption at times when the system has too much capacity. National Grid uses DSR as a tool to help balance national energy requirements. Through various balancing schemes, consumers are incentivised to ‘flex’ their electricity use at required times to resolve issues on the grid. This helps to ensure a secure, sustainable and affordable electricity system. It can soften peaks in demand and fill in the troughs, especially at times when power is more abundant, affordable and clean.
Combined with energy efficiency and load reduction, an appropriate DSR asset can offset all or most of a business’ site load. This means a
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site’s entire consumption can be flexed to participate in DSR, maximising savings. Any business able to reduce or shift consumption during peak periods (e.g. typically between 4pm and 7pm on weekdays) – or to use on-site generation or battery storage assets – can expect to make significant savings on key non- commodity costs. There’s also the potential to earn revenue from participating in various Grid balancing services, which we estimate can generate between £60-75k per MWh. DSR can help you access a range of benefits – from significantly reducing peak non-commodity charges to earning revenue by participating in National Grid balancing services. If you work with the right provider on your DSR solution, you can also generate additional value for these operations by selling back unused volume at peak market prices through the day ahead (N2EX) and within day (APX) markets.
Looking ahead
So, while increased energy costs are inevitable, there are plenty of things you can do to counter the impact on your business. But change can’t be taken lightheartedly – you need to get the buy-in from everyone across the organisation as well as being willing to take on some significant initiatives if you don’t want to be stung by large costs. Energy efficiency should be on the minds of everyone to reduce waste anyway, so let’s make 2019 the year we see a change in the way it’s consumed.
npower.com March 2019 electrical wholesaler | 29
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