On the 24th July 2017, the UK government published a report describing its vision for the future of the UK’s energy system. The report titled “Upgrading our Energy System” is available for download here.
How energy storage will enable more businesses to become proactive energy users.
The press release accompanying the report boldly claimed that a transition to a new flexible system could help save the country up to £40bn in energy costs in the years to come. Why is this necessary? This is discussed in detail in another Rock Clean Energy blog; in summary, demand is growing and yet it is becoming increasingly challenging (i.e. expensive) to meet that demand and upgrade our system with the traditional centralised generation model and accommodate the growing proportion of variable renewables (wind and solar) on the system, at the same time.
As the world is becoming more connected, a better solution has emerged. A smart energy system, where demand can be intelligently controlled (up or down) to match the power being generated on the system. Allied to technologies that can store electricity, such as batteries, the system can be better managed without the same level of costly system upgrades and new large centralised power stations.
This transition has profound implications for energy users. Historically, we’ve all been passive consumers of energy at home and at work: flick a switch and the power flows, largely uninterrupted. We’ve taken this for granted and paid whatever bills are sent to us. The limit of our control has been deciding when to switch things on or off and to ‘shop around’ between suppliers for a better deal. However, the new system will also need to encourage us to use more electricity at times when it is plentiful and cut-back when it is in short supply. We’ll be encouraged to become more proactive consumers. This will be achieved in two ways:
- Time of use pricing where the unit price of electricity varies at different times of the day.
- Granting third parties (aggregators) the ability to control some of our devices, within pre-determined limits, in return for agreed payments (DSR).
If your business is a large energy user it is likely to already be subject to time of use pricing. You might even have negotiated with your energy supplier a tariff tailored to your consumption level and profile. A small number of businesses are also generating revenues through DSR by allowing some systems, such as motor driven pumps and fans, to be turned down for a short duration at times of peak demand on the electricity network.
Batteries can generate revenue by both importing and exporting power
However, DSR today is relatively limited - even rudimentary when compared to what will become possible. Currently, there are limits on how much pumps and fans can be turned down and for how long, before the impact on a business’s operation is noticeable and even detrimental. Batteries can overcome this and represent a step change. They create more system flexibility and allow more businesses to participate and benefit from DSR:
- Rather than adjust process-critical pumps and fans, batteries can be charged or discharged instead.
- Batteries can be charged or discharged in conjunction with traditional DSR methods, to provide more value to the network and leverage even more revenue.
- Batteries can be discharged i.e. exported, back to the network (export) when wholesale price signals are high (insufficient generation), making it worthwhile to do so, optimising revenue.
- Batteries can be charged when there is excess generation on the network and generate revenue for “absorbing” that excess power.
- Batteries can generate revenue by both importing and exporting power.
We are in the initial stages in this, the evolution of our energy system. However, the direction of travel is very clear. Rock Clean Energy is at the forefront of developments and as these opportunities become available, we will be working with our existing clients to configure their battery storage systems to maximise the revenues available.
For an initial discussion to see how we can provide a commercially attractive solution for your business, contact us.
NB - Discover how to get a free battery and installation with our Battery Energy Storage as a Service or BESaaS.