In May the UK saw the latest in the long line of announcements of major power stations closing.
Scottish and Southern Energy (SSE) confirmed that it would close Ferrybridge coal-fired power station in West Yorkshire next year, five years ahead of its timetabled closure.
While only operating at a fraction of its original 1,960MW generating capacity thanks to a combination of EU legislation and a fire last summer, the announcement nevertheless represented a significant blow, coming as it did after other closures in recent years, including plants at Tilbury, Kingsnorth and the Isle of Grain.
“The pace of new generation has been outstripped by closures,” said National Grid executive director John Pettigrew, speaking at an industry event in London last month.
“We are at a point of change in the energy landscape with the growth of intermittent wind and solar, and reduction in fossil fuels and nuclear generation.”
Pettigrew was speaking at the launch in Westminster of Power Responsive, National Grid’s new campaign to consult with major energy users to find out what is needed to encourage more firms to sign up to its demand response schemes, such as Demand Side Balancing Reserve (DSBR) and Short Term Operating Reserve (STOR).
We want to be achieving 30-40% of our balancing from demand response by 2020
National Grid’s Duncan Burt
These schemes are designed to encourage energy users to adjust their electricity usage to help National Grid balance demand and supply on the UK electricity network – typically this means paying major users of electricity to reduce their demand at times of peak use.
As large power plants close and more renewable electricity comes online, the grid’s generating capacity margin becomes both tighter and more variable, making the ability to juggle not only generating supply but also electricity demand increasingly crucial for the grid operator.
National Grid head of commercial operations Duncan Burt tells Process Engineering that he sees demand response forming the major part of balancing operations in years to come.
“We want to be achieving 30-40% of our balancing from demand response by 2020,” says Burt.
”By 2030, we want to do the majority of our balancing on demand.”
According to Department of Energy and Climate Change (DECC) director David Capper, also speaking at June’s Power Responsive launch event, the technical potential for load shifting could be anything between 1.2GW and 4.4GW in the commercial sector alone.
Another potential 1.3-2.5GW could be found in the domestic market.
However, there is a long way to go before these kinds of figures are achieved and National Grid’s ambitions are realised: the operator has secured just 300MW of capacity for DSBR this winter, in addition to the 242MW procured for last winter. When de-rated for likely available capacity to the grid at any given time, DSBR will equate to just an extra 177MW of electricity generation capacity this winter.
There is also the small matter that, due to mild weather, National Grid never actually had to call on the DSBR facility last winter, so the scheme has yet to be tested other than in small-scale trials.
Under DSBR, firms capable of freeing up a minimum of 1MW capacity on the Grid for short periods between 4pm and 8pm on weekday evenings between November and February are paid fees ranging between £1,000 per MWh and £15,000 per MWh.
There is a lack of long-term certainty
Major Energy Users Council’s Eddie Proffitt
While the financial incentives sound appealing, it is the lack of certainty over potential long-term usage and revenues that some at the Power Responsive event last month felt was the biggest barrier to more firms signing up to demand response schemes.
“There is a lack of long-term certainty,” said Major Energy Users Council gas and carbons chairman Eddie Proffitt, speaking in London.
“It can take up to 12 months between first getting involved in demand side response to directly providing a service.”
It is precisely to address concerns such as these that National Grid set up Power Responsive to gather opinions and solutions from industry over the next 12-18 months.
“We have always designed our products to be exactly what we need,” says Burt.
“We (now) need to adapt the products so that the experience is customer-led. Someone might have a concrete plant, someone else a chemical process, while another is a supermarket. In each case what [the customer can provide in terms of demand capacity and responsiveness] is something different.”
The grid operator is already looking at addressing barriers to entry such as minimum capacity requirements, with Burt saying plans are being considered to lower these.
In addition, it has sought to make its STOR scheme – which is dominated by reserve capacity generators – more accessible to demand response providers through the creation of a dedicated scheme called STOR Runway. National Grid has committed to 200MW of capacity in its next STOR tender round being dedicated to demand response providers, as opposed to the electricity generators that make up the bulk of STOR’s 2GW capacity.
“At the moment, we get more tenders to STOR than we need, which is positive as it drives down costs,” says Burt.
“On the flip side, it makes it harder for new demand side entrants to get involved, as they have to sign up companies or sites willing to reduce demand with no guarantee they will get paid for it. That’s why we’re aiming for 200MW of our next tender round (for delivery during 2015/16) to come exclusively from demand side response. We’ve called this STOR Runway, as it helps new entrants get off the ground.”
Of those firms already involved in DSBR and STOR, a significant proportion have come from the water industry. This is no mistake, according to United Utilities business development director Neil Gillespie.
“In wastewater treatment, electricity is the second highest cost,” said Gillespie, also speaking at the Power Responsive event.
“The industry is price regulated, so although energy prices are increasing, water utilities cannot pass these costs on to customers. This means they have to: use less; generate more (130 GW selfgeneration); and use smarter.”
Anglian Water was one of 12 companies that took part in the DSBR pilot over the winter. Although the DSBR was never used, National Grid was able to thoroughly test how the system would work if it were ever needed.
“We are able to call upon back-up generators at 80 of our operational sites across the Anglian region,” says Anglian Water energy supply and demand specialist Ed Knox.
“We control them remotely through our telemetry system. This means we can easily switch to the generators at the sites should we get a DSBR call.”
Anglian Water, which has its headquarters in Huntington, Cambridgeshire and employs around 4,000 people, supplies water to homes and business across a huge area taking in Bedfordshire, Buckinghamshire, Cambridgeshire, Essex, Lincolnshire, Norfolk, Northamptonshire, Nottinghamshire and Suffolk.
It also provides drainage and sewerage services to a wider area stretching from the Humber in the north to the River Thames in the south, taking in an area that covers the River Great Ouse and a small part of Greater London around Upminster.
“If we needed to swing into action to answer a DSBR call, each generator would first satisfy the power demand of the site, with any excess power exported onto the grid,” says Knox.
“This set-up enables Anglian Water to respond to DSBR events without having any impact on the processes at its water and water recycling sites.”
Another water company to sign up to DSBR is Dwr Cymru Welsh Water (DCWW). The utility uses large amounts of energy to deliver water, sewerage and trade effluent services to homes and businesses in Wales and parts of Herefordshire.
“We were well aware of the National Grid DSBR initiative, and as a responsible energy consumer, we thought it was something we should get involved with,” says Welsh Water energy operations manager Ben Burggraaf.
“We have regular energy audits to make sure energy costs are controlled and as part of this we identified a process that might be used as part of the DSBR scheme.”
DCWW came up with the simple idea that if it was called upon it could turn down or turn off air blowers at several waste treatment plants. The blowers pump oxygen into tanks to help break down bacteria during the treatment of sewerage.
Up to 40% of the total power used at a wastewater treatment plant is down to the air blowers.
“At some of the plants we can turn the blowers down, at others we can isolate the blowers, and perhaps just leave one of them running, whilst maintaining regulatory compliance,” says Burggraaf.
“If and when DSBR kicks in, we’ll be reducing our energy usage at peak times, and being rewarded for it, while National Grid is able to control its supply and demand.”
Burt says his hope is that by engaging a wider range of industries and making more companies aware of the benefits, the Power Responsive campaign will help open up the borders of the demand response market beyond early adopters such as the water companies.
He adds that the demand response market in the future is also likely to not simply just be about asking facilities to reduce energy consumption: due to the intermittency of renewables, it is also likely that users could be asked to increase their electricity usage at times of low demand, for example when the wind is blowing hard and wind turbines are generating.
“When we talk about demand side we are not talking about just managing for the peaks,” says Burt.
“There are times when we will want to increase demand. We have seen our first few negative pricing periods over the last couple of weekends. That will increase in the future, and we hope the demand market will respond.”