CHP unit ‘earns extra £273 every hour’ it participates in Dong’s revenue share balancing scheme


A firm that operates a 3MW combined heat and power plant says it has earned and additional £273 on average every hour it has participated in a balancing scheme operated by renewable energy supplier Dong Energy.

The Renewable Balancing Reserve essentially shares revenues with flexible energy producers or consumers by paying them to help Dong reduce imbalance charges.

Energy firms have to match supply and demand every half hour. If they do not, they face steep penalties. From November next year, these will rise significantly, to £6,000 per MWh.

Energy suppliers, particularly those with less flexible generation assets, are therefore trying to head off significant risk by taking novel approaches.

Dong launched the RBR product 18 months ago and appears to be gaining traction with customers, partially because it has less prescriptive rules than many other demand-side response products.

Via RBR, Dong effectively allows customers to name their price for helping it to balance its portfolio. If that price is less than the balancing costs it will face during any given settlement period, it will offer customers that price, although they are not obliged to take action if they do not want to – and there are no penalties.

P3P operates the CHP unit on behalf of Britain’s largest commercial tomato grower. The firm said the ability to be flexible with its flexibility, and “respond remotely, activating the CHP engine from a phone” was a no-lose option. Participation in the scheme had increased overall export revenues by 4%, according to the company.

Ashley Phillips, sales and marketing director at Dong Energy Sales said RBR product was one of a number the firm is developing to help business cut costs and create revenue by monetising flexible energy consumption.

Interested in demand-side response? Download The Energyst’s new, free, 2017 DSR report here.

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