INDUSTRY 4.0/SMART FACTORIES
WAREHOUSING, HANDLING & STORAGE
SOLUTIONS FOR AFFORDABLE AND RELIABLE POWER: HOW BATTERY TECHNOLOGY IS HELPING COMPANIES WORK THROUGH THE ENERGY CRISIS I
n the current geopolitical and economic climate, cost and security of energy supply are two of the most pressing issues facing British industry. Solon Mardapittas, CEO at Powerstar, looks at the UK’s energy landscape and the technology helping mitigate the most damaging implications of the energy crisis.
The Energy Trilemma - affordability, security, and sustainability - is a global issue, brought into sharp focus in the energy crisis. Although the UK ranks high on the World Energy Trilemma Index, the last Index Report highlights some difficult issues for the UK for energy security and equity. The UK ranked 10 for energy security - a country’s ability to respond to supply shocks and to minimise disruption. For energy equity - reliable access to affordable power - the UK doesn’t figure in the top 10. Given this report doesn’t factor in the impact of Russia’s invasion of Ukraine, and with the UK’s reserves significantly exposed as compared to mainland Europe, our lack of storage capacity and high cost of electricity are major concerns for UK manufacturing. While sustainability - the third arm of the Energy Trilemma - is crucial, and with 2050 still the ambition for Net Zero, energy cost and stability are front and centre for manufacturing for the foreseeable future. Despite avoiding rolling blackouts across the UK so far, the energy crisis is with us for at least the next year, with some sources predicting that winter this year will be worse than last. Relying on stable and affordable energy from the National Grid is a risky strategy, so companies are increasingly taking control of their own energy. Energy affordability: Energy is one of the biggest outgoings for manufacturing, and the ongoing crisis continues to present a significant financial challenge. A Business Energy Tracker report from npower highlights the concerns of some of the UK’s top companies, with energy overtaking Covid as the top concern for 77% of businesses. Despite wholesale gas prices dropping now, it’s unlikely that this will have much positive impact on energy bills. While UK reserves dropped to dangerously low levels, the National Grid spent more than £4 billion last year to prevent blackouts and balance the Grid. It seems likely that, at some point, these costs will be passed on to customers, whether business or domestic. Energy security: Prior to the current crisis, disruption to power supply was already a
significant issue, with three percent of the UK’s working days lost, costing approximately £2.8 million for an average SME. The National Grid avoided scheduled blackouts last winter - largely helped by an unseasonably warm January. However, overall demand for electricity looks set to increase by 50% by 2035 as replacement of fossil fuels with more sustainable options places increasing demands on transmission and distribution networks. For manufacturing, this presents particular issues: geographically, if your business is located in an area where the Distribution Network Operator (DNO) is already constrained, then companies based in out-of-town industrial estates with poorer network infrastructure may face problems when looking to modernise. Electric Vehicle charging, for example, can create major demands on power supply, leading to power outages. As we move from centralised energy to more localised power generation and supply, energy disruption will only become a greater issue. Even before the current energy crisis, disruption to power supply - including power cuts for just a second or two, and minor fluctuations in voltage or frequency - caused major disruption to production lines, with lost income through scrappage and wastage, production downtime, and damage to vital equipment. Addressing the energy crisis with BESS technology: No company can function without secure power, and Uninterruptible Power Supply (UPS) has been a longstanding and effective means to ensure production continuity in the event of disruption. Traditional UPS protects critical equipment but has significant drawbacks as it switches constantly between AC and DC, losing 10-15% capacity. For an average 1MW system, this equates to around £200,000 in unnecessary expense. By comparison, a modern Battery Energy Storage System (BESS) will protect an entire site. A BESS can cover emergency back-up until either Grid power resumes or, in the event of longer-term disruption, back-up generators kick-in - and with a capacity loss of around one percent. Given that the cheapest unit of energy is the one you don’t use, the massive reduction in wasted energy from BESS makes for significant energy-related cost savings as well as providing opportunities for new revenue through grid balancing.
At a time when the UK’s energy distribution network is failing, and when government support
36 MARCH 2023 | FACTORY&HANDLINGSOLUTIONS
for business is still uncertain - making for greater complexities when forecasting energy budgets - the sophisticated capacity that BESS offers to manage energy purchase, storage, and usage, is proving a vital tool for manufacturers. Coupled with the potential to create new revenue, there is a compelling case for investment in BESS as a dynamic option when compared to the sunk costs of traditional UPS assets. Grid supply energy can be purchased when prices are lowest and stored for use when needed - ideally at peak times, for the greatest savings. Renewable firming offers the built-in capability to store any energy generated on-site, such as from PV solar or wind turbines, to be used when needed or sold to the Grid. This new revenue stream generally comes via a direct contract with the Grid, with the local DNO or, at a smaller scale, through an aggregator service. BESS owners can fulfil Demand Side Contract (DSR) obligations by turning up, turning down or offsetting their energy usage, helping the Grid to smooth out peaks and troughs in overall demand. Companies with the storage capacity and technology to engage in balancing services receive a guaranteed income if they can be flexible - helping companies gain greater control over their energy bills, at a time when the market is highly volatile.
BESS technology offers manufacturers a clear and demonstrable mechanism to manage the critical issues of energy security and energy affordability. For one energy-intensive manufacturer, Powerstar’s BESS solution has helped prevent blackouts that had been costing between £20,000 and £100,000 in lost profits, materials, and disruption to production. Reducing energy costs by 5% and offering new revenue through grid balancing is also benefitting the company’s bottom line. For another client, BESS is now protecting their site from an average of four power disruption incidents each year - making the payback on the installation less than two years, while also generating new income.
At a time when UK manufacturing continues to face significant issues in energy management, investment before next winter in technology to provide resilient and cost-effective power supply can reap significant benefits, helping manufacturers mitigate the worst aspects of the energy crisis.
Powerstar
www.powerstar.com 39
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