Consumers become part of the supply solution
Concerns about keeping the lights on at times of peak demand were back in the news yesterday, following a new assessment from National Grid that suggests the gap between total electricity generating capacity and peak demand could fall to just 1.2% this winter without special interventions.
These interventions include firing up old mothballed power stations and asking large consumers to power down in return for payment at times of peak demand.
Both solutions have potential drawbacks, with the former a very inefficient and polluting source of power, and the latter potentially impacting the UK’s productivity levels.
Security of supply a major concern
But taking action is clearly necessary. We know from talking to customers that many are worried about security of supply. In a survey we conducted last year, 77% flagged it as a major concern. So now we’re facing an even tighter energy crunch this winter, it’s key that National Grid use every tool at their disposal to ensure the lights stay on.
The actions taken so far have secured an extra 2.56GW capacity for the forthcoming winter – pushing the capacity margin up to a more comfortable 5% (see here for more details).
The upside for large consumers, of course, is that they now have a major role to play in this capacity-balancing act through demand-side response (DSR), and can secure additional sources of income as National Grid pay for this flexibility.
Demand-side-response opportunities
We are already working with many of our customers to ascertain how they can take advantage of DSR opportunities through schemes such as the National Grid’s Demand Side Balancing Reserve and Supplemental Balancing Reserve plus the Short-term Operating Reserve (STOR) market, so do get in touch if you’d like some advice (non-customers can always reach us via [email protected]).
This might require shifting working patterns to either side of the peak demand period of 4.30pm to 6.30pm between November and February. Or shifting to on-site generation during times of system stress, if the facilities exist.
Of course, if we have another mild winter, then the pressure is likely to reduce. But as is ever the case with Britain, it’s very hard to predict what the weather will do – despite forecasts which promise otherwise.
Infrastructure and interconnectors
Longer-term, clearly we need to build more generation infrastructure, and consider more power-sharing options via interconnectors.
Also in the news this week is the announcement that the planned interconnector between the UK and Norway has moved a step closer, with contracts now awarded to start building the necessary infrastructure.
It’s hoped this new 1.4GW interconnector – due for completion in 2021 – will aid sharing of surplus renewable energy, so providing an additional means of balancing supply and demand.
The important role interconnectors can play was evident earlier this week when a particularly windy period in Denmark saw wind turbines provide 140% of the country’s electricity needs. Rather than wasting the excess, interconnectors allowed 80% of the surplus to be redistributed to nearby Sweden, Norway and Germany.
Power sharing with Norway
With a power-sharing interconnector between the UK and Norway, it’s hoped we might be able to send any surplus renewable power their way, where if it cannot be used, could at least be stored via their plentiful hydropower facilities. Then when we are looking at a supply shortfall, this stored power could be released back to us.
Two new interconnectors are also in construction between the UK and France, one of which is expected to harness future tidal power being developed on the Channel Islands.
So lots of new measures in the pipeline – literally. But clearly these won’t be viable for some years to come. So special measures are necessary to keep the lights on, and consumers are becoming an increasingly important part of the short-term solution.
Wayne Mitchell is Director of Markets & Innovation for npower Business Solutions
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