These days, when conversations with customers turn to maximising value from energy management, I get asked about Demand Side Response more than anything else.
Explaining the best way to take advantage of the potential opportunities in a few sentences is challenging, as there are so many possible ways to benefit (see The business benefits of DSR for more on this).
But when a business is looking to generate additional revenue with no long-term commitment or obligation, I always start with our Wholesale Market Access service.
Wholesale Market Access enables your business to earn revenue at times of high wholesale energy market prices, either by increasing on-site generation or by reducing consumption for specified periods. Those with generation capacity to spare can also earn from exporting power.
Name your price
The way it works is simple. You choose the price that makes taking DSR action worth your while, and our team of experts will then monitor the market and alert you once this price can be achieved. Only then do you turn down your demand – or switch to on-site generation. And we trade the volume you free up on your behalf.
Much is being made of the role National Grid’s Balancing Mechanism (which allows you to trade this spare volume) is set to play as a revenue stream for DSR customers. And while we offer access to this, we cast our net wider to maximise all market value streams.
Access a £6bn market
Through Wholesale Market Access, you can access the Day Ahead (N2EX) and Within Day (APX) markets, right up until each delivery period. Together, these markets trade around 125 TWh a year, or around £6-billion in cumulative trade value.
We also monitor National Grid’s Balancing Mechanism. Although lower-traded volumes mean that value wise, it’s far less than either the N2EX or APX – trading in the region of £350-million a year – it can still provide opportunities during periods of extreme system stress.
However, accessing and operating within the Balancing Mechanism is by no means simple. It can also be expensive if you are unable to deliver committed volumes, as well as carrying no guarantee that National Grid will utilise your flexibility.
The beauty of Wholesale Market Access is that it’s very easy to participate. All you need to do is tell us your ‘Strike Price’ – that is the minimum you’d be prepared to trade your volume at – plus your availability, and we’ll do the rest.
And of course, if we achieve more than your Strike Price (which we often do), all that benefit goes straight back to your bottom line.
Fully managed on your behalf
Wholesale Market Access is fully managed and overseen by our award-winning Optimisation Desk and Energy HQ team. We can even automate turning your asset on/off for the specified period. So we do the hard work and manage all the complexities on your behalf.
And unlike other DSR schemes, Wholesale Market Access carries no obligation, so there’s no penalty if you decide not to participate or fail to meet your load management commitment.
Net up to £60k per megawatt
Wholesale Market Access has the potential to net you between £30-60k per megawatt of capacity per annum (with the majority of income generated during winter peaks), so can be a valuable source of revenue.
It can be used as a stand-alone DSR activity, which is a popular no-commitment way with customers looking to start DSR participation. Or Wholesale Market Access Service can form part of a wider DSR strategy, alongside participation in National Grid Balancing Services or our Automated Triad Service.
You can find out more by getting in touch with our Energy HQ team via [email protected]npower.com. We’d be delighted to assess the value you could potentially unlock in your business and provide a realistic forecast of DSR income/savings.
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To check out the DSR Clinic from Energy HQ on our site, click here.