Incentives for reserve capacity

The recent policy reforms will encourage energy forms more likely to come offline, as the wind stops blowing, or the sun stops shining, for instance. Because of this, the National […]

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By Tom Gibson

The recent policy reforms will encourage energy forms more likely to come offline, as the wind stops blowing, or the sun stops shining, for instance. Because of this, the National Grid will need support from consumers who can either reduce the amount of electricity they use, or switch to a backup source of supply, such as a diesel generator, providing extra capacity to the network.

Participants can make money and save up to £40,000 per megawatt of capacity provided through a mechanism called Short Term Operating Reserve. STOR pays capacity providers in two ways; first for just being available, and next when they are called on to operate.

Derek Dixon, CEO of Energy Services Partnership said: “Our involvement with STOR and demand response goes back more than 20 years to our Yorkshire Electricity days and its great that the energy industry is now really trying to help customers use their energy in clever ways, rather than simply building expensive power stations and increasing the country’s carbon emissions.”

The Electricity Market Reform released on 12 July 2011 confirms the growing long term need for STOR, stating “As greater amounts of wind generation are added to the system, National Grid expects that the level of required reserve will increase, due to the need to cope with real time unexpected changes in wind generation in addition to existing challenges; this can be both the wind dropping off or blowing too hard causing generation to drop rapidly.”

Companies can either contract directly with National Grid or use the services of an aggregator such as ESP that has the technology and market experience needed to equip and bid a site into the programme. ESP say that sites with as little as a few hundreds of kilowatts can participate in the scheme, by turning down cooling and refrigeration or using standby diesel generators for example