Rolls-Royce and Nestlé explore the benefits of flexible energy generation
Flexible energy generation, led by battery storage and demand response measures, is a route being "actively explored" by energy-intensive multinational firms Rolls-Royce and Nestlé, the energy managers of the respective companies confirmed earlier this week.
With the price of efficient batteries tumbling rapidly, companies are starting to appreciate that the technology, along with demand response – which sees energy users receive payments for shifting non-essential processes away from hours of peak demand – can work as a cost-effective approach to meet their own energy needs.
According to research, a flexible power system which takes advantage of these technologies could create savings for the UK to the tune of £8bn in 15 years, while the Government’s own study suggests that the removal of barriers towards deployment could save Britain up to £40bn across the electricity system by 2050.
The business case was put forward by companies across the private sector spectrum throughout the day at the edie Energy Management Conference in Birmingham on Tuesday (28 February). Rolls-Royce’s energy manager Anthony Hatfield revealed the engineering firm was “actively seeking” to reduce peak demand at its global test facilities to minimise its environmental impact and maintain competitiveness.
“We’re currently in talks with several suppliers to get involved with demand response mechanisms,” Hatfield said. “This way we can link to the grid our own energy distribution and storage assets. Through the exercises, we have already taken we are looking to upgrade our energy management systems.
“We’re looking to turn down and switch off our assets, hopefully generate some revenue, and reduce are carbon emissions.”
The proposals form part of broader efforts to reduce emissions by 50% by 2025, from a 2014 baseline, along with an aim for energy use to fall by 30% by 2020. The FTSE-100 company last year ring-fenced around £11m to invest in energy and carbon reduction initiatives, including the installation of a giant rooftop solar system at one of its largest UK factories.
Rolls-Royce is now turning its attentions to storage technologies, Hatfield said, to recover the heat and power lost at its portfolio of business units which include an array of test engines and nuclear reactors. Hatfield confirmed the firm was “exploring options” to install complementary solar PV for battery storage, in addition to stand-alone storage.
“This will give us options to potentially store excess energy generated by the solar schemes, and will charge off-peak and will discharge on-peak,” he said. “This will reduce our reliance during peak periods and improve our energy security. It saves us on costs by avoiding red rate and triad periods, and this is potentially something that could be fed into demand response mechanisms.”
Multinational food and drinks firm Nestlé also outlined its intentions to establish flexible generation as part of the group’s commitment to reduce the environmental impact of its global operations. The move would complement a host of up-and-running on-site low-carbon generation methods; the water branch of the company recently confirmed it will source 100% of its electricity from renewable energy sources at its UK bottling plant in Buxton.
In October 2015, the largest solar panel installation in the North East was switched on at Nestlé’s Fruit Pastille-producing Fawdon factory in Newcastle upon Tyne. As Nestlé looks to meet its 2020 goal to reduce its carbon intensity by 35% on a 2010 baselines, the firm’s head of environmental sustainability Andrew Griffiths confirmed that reducing peak demand had become an area of “real interest”.
“As a business in the UK, we used to be quite reluctant to go down the route of demand response because of the profile of our factories,” Griffiths said. “Now with the advent of much more cost-efficient battery storage, it starts to make that option much more interesting. There’s some really great opportunities that are starting to come out there that we’re actively looking to pursue.
“These are excellent ways to drive energy efficiency and reduce our own demand. It’s really critical because it’s much easier to do, it drives a business benefit from an economic perspective and it obviously has a significant positive environmental impact.”
Evolve the message
Already pioneering a demand response approach to energy management is UK construction material manufacturer Saint-Gobain, the parent company of major construction brands such as Jewson, Celotex and Artex. The firm has made a total saving of £165,000 and experienced an 11% fall in energy demand across its 20 sites in the UK and Ireland, after powering down its factories at peak energy periods.
In collaboration with energy suppler SmartestEnergy, the company’s demand-response initiative focused on reducing its exposure to triad charges, which are levied on large business users based on their electricity consumption over a three-and-a-half-hour period of highest demand on the grid each winter.
Speaking at the edie conference on Tuesday, Saint-Gobain’s energy engineer Scott Borders reiterated the financial benefits of switching off machinery and rescheduling factory operations for a short period of time.
“Even if it’s not for the full three hours, we can find parts of our operations that can stop using electricity from 4-7pm,” he explained. “With such a large portfolio of operations, it doesn’t take long before measures can start adding up to big numbers. I feel quite guilty that if it’s not in the hundreds of thousands or millions then I tend not to look at it because it’s so small in the bill, but when you take time to go back and look the costs can be quite horrendous.”
Borders emphasised the need for energy managers to evolve the message of energy-efficiency to engage internal stakeholders, insisting that proof of concept figures would force board members to take notice of the technology benefits.
“The easiest way is to do nothing,” Borders concluded. “And if we don’t do anything, all we will be doing is paying for other people who are going to do demand management. It’s quite a good incentive to let your board executives know that your competitors will be earning money out of your lack of action.
“We need to make sure the message is right. We need to be able to speak to our production community and finance community to find our if something has change after the decision we made in the first place. You need to be able to show, for example, that on a Sunday night when you are not doing anything, this is the energy you are using.
“We need to evolve our messages. With demand response, there are big savings to be made, six or seven digit numbers, and that will be our interest going forward.”