National Grid needs more firms to help balance the power system.
With some 35GW of renewables on the system, more than a third of it solar PV, summer may become as much of a challenge as winter.
That equates to a year-round revenue opportunity from National Grid alone. Yet relatively few firms provide balancing services via their onsite generation or ability to shift loads. Why?
According to The Energyst’s reader surveys, this is for a few key reasons, mainly fear of technical failure and/or incompatible processes and insufficient financial reward. But lack of understanding and the fact that the most UK firms have not been approached by either aggregators or energy suppliers regarding DSR are also factors.
According to our current survey (please take it here), of 98 responses to date, two thirds (65%) do not provide DSR. Of those, 33% of firms said they do not provide DSR because equipment/processes are not suitable, while a third also said they do not know enough about possible opportunities. 26% say returns are insufficiently attractive and 21% are concerned about impact on business operations.
The majority (60%) of these firms have been approached neither by aggregators nor suppliers, which might explain why some of these concerns remain. Yet 55% say they have some form of onsite generation (mostly solar, some back-up diesel and a few with CHP engines) suggesting suitability for some forms of DSR provision. Meanwhile, around one in six (18%) engage in peak network charge avoidance (Triad/DUoS red band).
Three quarters (74%) of those respondents say they would be interested in earning money from DSR if it did not impact their operations.
The survey asks respondents to briefly state how aggregators or suppliers could make it easier for them to participate in DSR. Here’s what those that offered a response say:
“Partner with battery/generator companies to offer a back up power supply package.”
“Send offers or quotations.”
“Reduce paperwork.”
“Simplify the entire market. Although that is not a job for aggregators or suppliers.”
“Aggregators can prepare load shed strategy for facilities in order to maximise savings/earning and minimise risks of energy reduction for the business.”
“Standardised protocols.”
“More information.”
“Longer contracts.”
“By providing an automated solution.”
“Assist with reviewing scale of opportunity if any in estate and also selling the benefits on to concerned stakeholders – e.g that will affect operations.”
“By offering detailed concept information.”
“Work out what we could have saved.”
“Including [it] as part of the supply agreement.”
“By giving consistent answers to queries.”
“Provide energy storage free of charge.”
“By not treating the subject as a ‘black art’ (which does nothing for confidence) and be more transparent about what is done and how it works/I can influence it.”
“Reduce scheme numbers to improve clarity of DSR requirements.”
“Make it simple, easy to understand and de-risk the opportunity for us.”
“Provide automated processes to join when capacity is available/spread the DR.”
One respondent simply said “explain”.
In terms of simplification, National Grid this week announced plans to redesign its balancing tools and the markets it has created for various forms of flexibility, recognising the need to bring in more providers and improve transparency.
But these early survey findings suggest there remains a need for better communication and cost effective technology solutions if DSR is genuinely going to trickle down from large power users to the broader market: The majority (53%) of firms that said they did not provide DSR were companies with between 1 and 51 employees and most had an annual energy spend of less than £1m.
While the world’s biggest animals achieve their size by scooping up krill, it could be that aggregators and suppliers see such an approach as too costly.
The survey’s full findings will be published in September. We would be very interested to hear end-user views on DSR, positive and negative. Please take the five minute survey here.
Related stories:
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Battery storage: Finance a challenge but businesses predict 3-7 year paybacks
National Grid plots major overhaul of balancing services market
As solar generation makes history, National Grid starts to feel the burn
Can National Grid hit its 2020 DSR target?
Free report: DSR and battery storage
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