Thousands of firms missing £20k energy opportunity

Nearly 10,000 UK businesses have the potential to save £20,000 or more each year by helping the National Grid balance electricity supply and demand, according to SmartestEnergy.

Businesses which can identify flexibility in their energy consumption can make money from the grid by providing demand side response (DSR) services – turning down or turning off non-essential energy use at times of high demand. 

National Grid has previously described the concept as a “smart energy revolution” and has launched a campaign, Power Responsive, to drive engagement. 

It already spends £1 billion a year on ‘balancing’ services, which could double within five years as power supply gradually tilts towards more intermittent renewable energy sources.  

According to SmartestEnergy, which is aggregating demand side response capacity to the National Grid through the government’s Capacity Market scheme, taking part makes good sense for businesses which have the flexibility to be able to deliver at least 250kW of capacity at certain times.

Business type

Businesses that can deliver this level of flexible capacity typically have annual electricity bills of at least £1 million. There are 9,700 businesses in the UK that fit this description. 

However, companies with a total demand of at least 500kW and an electricity bill of at least £500,000 should also explore their options with energy suppliers and aggregators. 

Companies likely to benefit most will have plant that can stand interruptions in supply for short periods. This includes refrigeration, cold stores, baking ovens, metal melting and heat treatment furnaces, some plastics moulding processes, water pumping systems and large buildings with air conditioning systems. Energy storage solutions can also help deliver extra capacity.

Moving off-peak

Flexing power consumption to times that suit the grid also gives companies the opportunity to avoid peak prices charged through time of use tariffs.

Robert Groves, chief executive of SmartestEnergy, said: “Electricity isn’t just a utility you take for granted but a valuable commodity. 

“Matching demand to supply is key to a cost-effective and reliable energy system, and businesses which can help do this stand to gain by tens of thousands of pounds a year. The average business can shift 10 per cent of its energy usage with little impact on operations.”

For example, a business which has a 250kW DSR contract could save nearly £20,000 a year, according to SmartestEnergy. It would make £2,812 from Capacity Market payments from the National Grid but would save an additional £15,000 by shifting consumption off-peak.

Posted under Energy Efficiency and Environmental Technologies and Renewable Energy on 7 February 2017