Okay, I accept this may sound rather far fetched. But with recent news that global levels of CO2 have reached record highs (putting us on track for a life-limiting 3˚C temperature rise), the role of Demand Side Response (DSR) as a tool to cut emissions has been getting more attention.

As more companies start to demand-side respond, so National Grid has more flexibility to balance periods of stress on the electricity system – and therefore needs to rely less on so much standby generation from fossil fuel plant.

DSR capacity is certainly increasing. For example, in the latest Capacity Auction (2016 T-4), the number of DSR contracts awarded was up from 450MW in 2015 to 1400MW. But this still only represents about 2.8% of the UK’s peak demand.

 

Offsetting three nuclear power stations

According to the Association for Decentralised Energy, around 9.8GW of potential DSR capacity could be delivered by the industrial and commercial sector by 2020. That’s the equivalent of having THREE new Hinkley Point nuclear power stations (and a lot cheaper than the £19.6bn and rising cost of building just one!).

Certainly in other countries, DSR plays a key role in reducing peak demand. In the US and Australia, for example, 15% of peak demand can currently be met by DSR, according to the Energy & Climate Intelligence Unit.

And it’s a key growth market in the UK. But while the environmental benefits are of course a draw, the main driver for most businesses is the revenue DSR can generate – and the value this delivers to offset the impact of rising energy costs.

 

DSR netting up to £180k per megawatt

Our Energy HQ team is finding customers can generate between £65k and £180k per megawatt a year from our range of DSR services – or as much as £240k+ per MWh for high (>1) C-rated battery storage.

These services include Access STOR and Access Static FFR, which allow participation in key National Grid balancing services via our aggregation platform. We also support reducing demand during peak periods via our Automated Triad Service.

The latest DSR opportunity we are now offering customers is what we’re calling Market Access. This enables your business to earn revenue at times of high market prices, either by increasing generation or by reducing consumption for specified periods.

 

Using DSR to benefit from market price spikes

Market Access, overseen by our award-winning Optimisation Desk, provides a managed route to the Day Ahead and Within Day wholesale market for both generators (or businesses with on-site generation) and consumers.

You tell us your ‘Strike Price’ and availability and we’ll do the rest. We can even automate turning your asset on/off for the specified period. So we do the hard work and manage all the complexities on your behalf.

And unlike other DSR schemes, Market Access carries no obligation, so there’s no penalty if you decide not to participate or fail to meet your load management commitment.

 

Net up to £60k per megawatt

Market Access has the potential to net you between £30-60k per megawatt of capacity per annum (with the majority of income generated during winter peaks), so can be a valuable source of revenue.

It can be used as a stand-alone DSR activity, which is a popular no-commitment way with customers looking to start DSR participation. Or Market Access Service can form part of a wider DSR strategy, alongside participation in our Access STOR and Access Static FFR services, or our Automated Triad Service.

You can find out more by getting in touch with our Energy HQ team via EnergyHQ@npower.com – or if you’re an existing customer, talk to your Client Lead.

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