National Grid to incentivise energy demand response during summer of excess
The National Grid will offer businesses money to shift their intensive power demand processes to periods of low demand as Britain prepares for a summer that will generate excess amounts of electricity.
In its 2016 Summer Outlook Report, released on Thursday (7 April), the Grid reveals that the UK will have too much electricity this summer due in part to the growth in wind and solar farms.
It has therefore outlined plans to balance potential fluctuations in electricity demand - which is expected to hit a record low of around 35.7GW - by offering a new demand-side response scheme to businesses, as generation looks set to reach 67.4GW in capacity in the coming months.
The Grid is essentially turning to businesses to help counteract the additional electricity that is being produced by ‘inflexible’ sources such as wind and solar.
The report states: “In the summer, we see a significant reduction in demand on the transmission system. As a result, we need to make sure that there is sufficient flexible generation available to meet demand while maintaining frequency response. This ensures that the system can respond to the largest generation or demand loss.
“Based on current data, there is a risk that we may need to ask inflexible generators to reduce their output during the weeks commencing 20 June, 25 July and 29 August.”
In order to strike a steady balance, the National Grid is now considering demand response as a key component of the UK’s electricity supply chain and will invest £400m into it by 2020. Specifically, the Grid is promoting its Power Responsive initiative to businesses that use large amounts of electricity.
Launched in June last year, the Power Responsive demand-side response scheme offers financial incentives to organisations that are willing and able to shift demand-intensive processes - such as pumping or heating - to times when there is lower electricity demand on the transmission system.
The surplus in electricity, National Grid says, has been attributed to the growth of renewable sources such as wind and solar farms – renewables as a whole now make up 24.7% of the electricity mix. But, due to a decrease in electricity demand, the Grid could be forced to enact emergency procedures which could see wind generation 'curtailed' during the summer.
Historically, the supply and demand relationship for Britain's electricity has been maintained at an even and balanced point, largely due to power plants slowing generation during low demand periods.
But the rapid rise of renewables - which has seen wind power generation rise by 15% as well as a flurry of solar installations completed ahead of recent subsidy cuts – has led the National Grid to introduce these new market measures to “keep the system secure”.
Virtual power stations
As part of the Power Responsive initiative, the Grid is piloting a new Footroom service with demand-response provider Flexitricity. Footroom offers industrial, commercial and public-sector sites additional revenue if they can either decrease generation or increase electricity consumption upon request.
Flexitricity this week repeated calls for businesses to become a part of this network of ‘virtual power stations' and secure a share of the £4.5m pot available from the demand-side initiative.
Energy firms are also tuning into demand response services. Denmark-based offshore wind developer DONG Energy recently unveiled a 'first-of-its-kind' Renewable Balancing Reserve service. According to DONG, the scheme gives customers the opportunity to reduce intermittency in grid supply and also creates a new revenue stream by sharing the cost savings that result.