The next couple of years could be a bumpy ride for businesses. Those that can access the flexibility in their assets and operations can insulate themselves from volatility and rising costs.
Non-energy parts of your electricity bill will increase sharply over the next few years. Levies to support renewable generation, combined with levies to balance that renewable generation and ensure security of supply, will become more significant from next winter.
Changes to the balancing and settlement regime will make half-hourly prices spikier. Transmission charges (Triads) are set to increase by more than 10% the year after next, according to analysis by energy companies. Many more businesses are also being moved to half-hourly metering and settlement this year and next, meaning more firms will be exposed to peak charging.
Meanwhile, impending thermal plant closures will diminish National Grid’s ability to balance the power system using spinning reserve. Reduced inertia requires increased demand-side participation. In other words, there is an opportunity to reduce costs and generate income for businesses that provide balancing services – turning equipment on or off, up or down, when required.
Or there is increased price risk for passive energy consumers. National Grid recently said it expected balancing costs to double from £1bn per year to £2bn within five years.
While wholesale power costs are currently low, the non-energy parts of the bill now make up around half of the total – and they will rise for the foreseeable future. Meanwhile, shrinking capacity margins could add to wholesale power price volatility, presenting both an opportunity and a threat to businesses.
Those factors make it good time to find out more about demand-side response.
National Grid, the department of energy & climate change (Decc), energy suppliers, aggregators and industrial and commercial end-users will outline the opportunities for businesses at the DSR Event on 8 September in London. It’s free to firms wishing to find out how they can provide balancing services – and provides a platform to tell market makers how to make it easier to bring more businesses into the fold.
The event will also look at how firms can get the best bang for buck from existing mechanisms, how to build business cases, how firms that can turn down assets can participate in the capacity market, and what’s coming down the track in terms of battery storage schemes
Reserve your seat at www.dsrevent.uk