Around 10,000 UK firms could make around £20,000 a year in cost savings or revenue by shifting or curtailing power use at peak times, according to analysis by SmartestEnergy.
The firm basis its figures on businesses consuming 10GWh of power a year. According to Cornwall Energy, around 9,700 firms use at least that amount. SmartestEnergy, which is bidding into next week’s capacity auction, said those savings applied to companies with 250kW of flexible capacity.
Based on the last auction, which cleared at £22.50/kW, revenue for companies that sign a demand-side response contract with the supplier would equate to £2,812 from capacity market payments (250 x £11.25 – representing a 50% revenue share).
However, SmartestEnergy said firms with that level of flexibility could make far greater savings: an additional £15,000 by shifting consumption off peak and £17,150 by stopping consumption altogether during evening winter peaks.
Between October and February each kilowatt consumed between 4pm and 6pm costs on average eight times more than off-peak power – £68.60 compared with £8.59. If businesses curtail peak generation they save £68.60. If they shift it to off peak they save £60.01, the firm explained. That equates to savings of £15,000 (250 x £60.01) by shifting consumption off peak and £17,150 by stopping consumption altogether (250 x £68.60), according to SmartestEnergy’s sums.
With non-commodity costs markedly increasing over the year ahead, allied with volatility in the wholesale and balancing markets, companies that can shift loads and sell power back to the market at peak times can make significant revenue, according to SmartestEnergy.
“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,” said CEO Robert Groves.
The firm, which is an aggregator as well as an energy supplier, touted its ability to maximise returns for customers.
“We can navigate the complexities of DSR contracts, spot opportunities to sell the electricity they have bought at a good profit, and ensure that savings on non-commodity charges are passed on,” said Groves.
He added that most companies could shift around 10% of load “with little impact on operations”.
While that represents an opportunity for some businesses, SmartestEnergy recently warned that companies that do not take action will this year be facing ‘huge’ hikes from the impact of the capacity market.