Insights / Building flexibility into your electrical assets

Building flexibility into your electrical assets

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

Of all the potential efficiencies you can implement, energy efficiency is one of the most important: it can play a major role in meeting your financial and environmental targets.

The key is creating and managing flexibility in how you use – and, potentially, generate – your electricity.

By reacting to the peaks and troughs in the cost of electricity, you can reduce energy expenditure and, if you have renewable generation assets in place, gain extra revenue.

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Understanding electric assets

Your electric assets will vary depending on the size and nature of your 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, and 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 you can decide 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 the Drax 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 you can find the flexibility to respond to the market with your 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. You 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 working with the Drax Electric Assets team to assess its electric assets and optimise flexibility. This meant Sundown Products was able to gain a better understanding of its energy use.

Sundown and the Electric Assets team then 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 (which coincides with the machines being temporarily switched off).

Opportunities to generate revenue

In addition to saving money by avoiding peak system prices, organisations 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 in balance.

With the growing use of renewable energy such as wind and solar power, the grid requires closer management and greater flexibility. This is because renewable energy sources are more intermittent and less predictable than fossil fuel. Through DSR, National Grid offers organisations a series of financial incentives to increase or decrease their energy output on request. In turn, this allows the system operator to maintain the grid’s balance.

Reserve and frequency response services

Options include reserve services, which National Grid buys from organisations able to adjust their energy generation or usage within a set lead time following a request. There are also frequency response services, for those in a position to automatically adjust their energy consumption at very short notice.

The Capacity Market

You can also be renumerated for energy flexibility through the Capacity Market, a government initiative that National Grid runs. It’s designed to guarantee the security of electricity supply and ensure sufficient power to meet projected future demand. The Capacity Market offers payments to electricity generators and providers that commit to delivering additional capacity when needed.

Sites with their own renewable generation facilities – such as wind turbines, 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 energy. This necessitates increased electricity system flexibility to ensure a safe and reliable supply.

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, organisations can play a part in preparing the energy system for a net zero future.

The next steps

The route to energy flexibility will look different for every organisation. The Drax Electric Assets team can help you find the right option.

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 optimising your electric assets. We provide this value via monthly savings on your energy bill – all through measures that have minimal impact on your operations.

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

Contact our Electric Assets team

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