Building flexibility into your electrical assets
No matter what sector you’re in, efficiency’s crucial – whether it’s getting the most out of your resources or streamlining processes.
Energy efficiency’s particularly important as it can play a major role in meeting your financial and environmental targets.
It involves 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. By reacting to requests from the National Grid Electricity System Operator (NGESO), and particularly if you have renewable generation assets in place, you can generate revenue.
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
- EV chargers
Electric assets also include sources of electricity generation such as gas generators, anaerobic digesters, 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 Jake Miller, Electric Assets Lead at Drax, explains. “Consumers can flex their assets by turning them down or off when prices are high. There are increasing opportunities to benefit from turning assets up or on when prices are low or negative. If organisations can optimise the flexibility of their operations sufficiently to do both, they’ll be in line to make significant savings.”
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 offer 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, your organisation may own large fridges and freezers. By turning these assets down or off when demand is at its highest, while keeping temperate levels within safe operational ranges, you can generate cost savings. You might also consider rescheduling tasks or processes from day to night-time – when demand and rates are lower.
A £45,000 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 an initial £35,000 per year, without disrupting its operations. Annual savings have since increased to £45,000. The solutions include measures such as changing the times when employees take breaks to coincide with temporary switching off of the machines.
Opportunities to generate revenue
In addition to saving money by avoiding peak system prices, you can also make money from various grid services by being flexible in your energy use. NGESO 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 fuels. Through DSR, National Grid offers organisations a series of financial incentives to increase or decrease their energy output on request and in order to maintain the grid’s supply-demand balance.
Reserve and frequency response services
DSR 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. Frequency response services exist for those in a position to automatically adjust their energy consumption at very short notice.
The Demand Flexibility Service (DFS) launched in November 2022 as an ‘enhanced action service’ to give organisations easy access to flexibility revenues. It previously supported manual turndown and included day ahead flexibility requests, enabling Drax to generate over £1m in revenue for its participating customers. However, NGESO’s proposed changes (taking effect from autumn 2024) mean it’s likely to favour automated response and become a peak reserve product in the future.
The Capacity Market
Your energy supplier can also remunerate you for energy-supply 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 providing additional capacity when it’s needed.
Sites with their own renewable generation facilities – such as wind turbines, solar panels or biogas generators – can take part in auctions to deliver their excess electricity to the grid.
Working towards net zero
Energy flexibility’s 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.
Sustainable business media brand, edie, recently reported a policymakers’ estimate that adding flexibility to the UK’s energy grid will generate savings of up to £50bn by 2050. By optimising the flexibility of your electric assets, your organisation 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 tailor a flexibility solution for yours.
We analyse the electric machinery and equipment you own, 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.
Furthermore, we operate a demand flexibility scheme called ElectriFlex. The service – which encompasses the existing DFS – helps organisations benefit from manual DSR, whatever the time of year.
It offers a simple and commitment-free way to explore the opportunities of demand flexibility, enabling consumers to retain control of whether they opt in or out of each request. These requests are clear – and there aren’t any penalties if you opt in but end up being unable to deliver the flexibility.
To find out more about how Drax can help, contact our Electric Assets team today.
Please note that since 1 October 2024, NGESO is now the National Energy System Operator (NESO).
Contact our Electric Assets team
