Insights / Building flexibility into your electrical assets

Building flexibility into your electrical assets

1st September 2021

No matter what business you’re in, efficiency is crucial. Whether it’s getting the most out of your resources or streamlining processes.

Of all the potential efficiencies businesses can implement, energy efficiency is one of the most important, playing a major role in meeting organisations financial and environmental targets.

Key to optimising energy efficiency is creating and managing flexibility, in how electricity is both used and generated, by electric assets.

By reacting to the peaks and troughs in the cost of electricity, businesses can reduce energy expenditure and, if they have renewable assets in place, generate revenue.

Understanding electric assets

Businesses’ electric assets vary depending on the size and nature of its operations. The term covers a range of machinery and equipment such as:

  • refrigerators and other cold storage
  • combined heat and power units
  • heating, drying and cooling processes
  • engines
  • pumps
  • compressors
  • motors
  • air separation units.

Electric assets also include sources of electricity generation such as gas generator, anaerobic digestion, solar and wind power installations, as well as batteries.

Assessing your energy consumption

Building flexibility into your energy consumption starts with assessing your electric assets to determine when they use or generate energy – then deciding if the level or timing of that power consumption can change.

Electric assets are flexible when they’re able to “respond to market signals”, as Michael Watts, Commercial Manager in Drax’s Electric Assets team, explains. “If there’s a time when prices are low, then assets can ramp up. If there’s a time when prices are more expensive, they can turn down.”

Cost savings and cost avoidance

The price of electricity in the UK is set in half-hourly blocks throughout the day. The price during each period changes as demand for electricity rises and falls. Flexible electric assets that can avoid peak electricity prices offers clear cost savings and cost avoidance benefits. There are a number of ways businesses can find the flexibility to respond to the market with their electric assets.

For example, organisations with large fridges and freezers can turn these assets down or off when demand is at its highest, while keeping temperate levels within safe operational ranges. Businesses can also reschedule tasks or processes from day to night-time – when demand and rates are lower.

A £35,000 cost reduction

Agricultural business Sundown Products generated significant savings by assessing its electric assets and optimising their flexibility. Specialising in animal feed and bedding production, Sundown Products worked with Drax’s Electric Assets team to gain a better understanding of its energy use.

Based on this understanding, Sundown implemented energy flexibility solutions that saved the business £35,000 per year, without disrupting its operations. The solutions include measures such as changing the times when employees take breaks and the machines are temporarily switched off.

Opportunities to generate revenue

In addition to saving money by avoiding peak system prices, businesses can also make money from various grid services by being flexible in their energy use. National Grid ESO offers a range of ancillary services broadly referred to as Demand Side Response (DSR) mechanisms to incentivise flexibility and help keep the energy grid balanced.

With the growing use of renewable energy such as wind and solar power, the grid requires closer management and greater flexibility, as renewable energy sources are more intermittent and less predictable than fossil fuel. Through DSR, National Grid offers businesses a series of financial incentives to help keep the grid balanced by increasing or decreasing their energy output on request.

Reserve and frequency response services

Options include reserve services, which National Grid buys from businesses able to adjust their energy generation or usage within a set lead time of receiving a signal requesting them to do so. There are also frequency response services, for businesses in a position to automatically adjust their energy consumption at very short notice period.

The Capacity Market

Another way to be renumerated for energy flexibility is through the Capacity Market, a government initiative run by National Grid. Designed to guarantee the security of electricity supply and ensure sufficient electricity to meet projected future demand, it offers payments to electricity generators and providers who commit to delivering additional capacity when needed.

Sites with their own renewable generation faculties, such as wind turbines, roof-top solar panels or biogas generation, can take part in auctions to deliver their excess electricity to the grid.

Working towards net zero

Energy flexibility is crucial to helping the UK reach its commitment to a net zero economy by 2050. As industries move away from fossil fuels and electric vehicles become more prominent, electricity will become an even more important source of power. This necessitates increased electricity system flexibility to ensure a safe and reliable supply.

As part of a projection where electric heating is the primary pathway to decarbonisation, the Carbon Trust estimates that enhancing the flexibility of the energy system could reduce the cost of the UK’s transition to net zero by up to £16.7 billion a year. By optimising the flexibility of their electric assets, businesses can play a part in readying the energy system for a net zero future.

The next steps

The route to energy flexibility will look different for every business. Drax’s Electric Assets team helps customers find the right option for them.

We analyse the electric machinery and equipment you have, assess your energy usage, and review your operations. Based on this knowledge, we suggest a strategy for your company to optimise its electric assets and provide this value via monthly savings on your energy bill – all through measures that have minimal impact on the running of your business.

To find out more about how Drax can help, contact our Electric Assets team today.

Contact our Electric Assets team

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