Welcome to our final blog in our energy solutions series (read all our posts on this topic here. ) Last time, we gave an overview on Demand Side Response DSR and today, we’re going to be discussing how your business can earn money from DSR.
Energy prices fluctuate daily, altered by world events, daily demands, seasonal changes- the list goes on. Even without directly earning money from DSR, a business can save a huge amount of money simply by avoiding peak network charges. An evening peak occurs everyday from around 5-8pm which is steeper in the winter months, there’s also a morning rise- during the night hours, consumption is at a low. Bernard Matthews, a turkey farm, avoided peak time by one hour by moving the lighting for their livestock- whilst this didn’t affect the turkey’s comfort level, it saved the company £40,000.
Demand Side Response DSR however, is able to directly earn you money by taking advantage of the Short Term Operating Reserve (STOR) service. STOR is a necessity for the National Grid because at certain points throughout the day during peak hours, requires reserve power which can either be dealt with via a backup source of generation or a demand in reduction. This is where we can link back to our battery storage blogs- selling the energy stored in batteries on your site back to the National Grid to earn money. By charging the battery during off peak cheaper hours, it means that not only is your business self reliant energy wise, but it’s also making money back from the Grid at a higher price than you paid for it. The response time for STOR is 5-20 minutes; the quicker the response time, the higher the price you’ll receive for the energy supplied. In terms of how long the service will be required, this can be anywhere up to 2 hours, but is at the lower end of the revenue earnings.
The highest earning flexible service is Frequency Services (FFR) which holds the responsibility of being expected to respond to a demand within 10s or 30s and offers a 30 minute average duration period (statistics are all provided by E-ON.) System frequency is controlled on a second to second basis- a continually changing variable which is the balancing system between the demand for electricity and the generation of electricity. The National Grid have a mandatory frequency response of +/ – 1% of 50Hz at all times. Due to this requirement, the Grid does have to rely on other systems, which is why FFR are required to respond at an incredibly fast rate- and are paid highly for their service.
A huge bonus for DSR is that you have the capacity to earn additional revenue from existing infrastructure- whilst you can earn money, you can also save money on your energy spend. According to E-ON, “Businesses have already earned more than £100m by providing capacity market savings since 2014. ADE anticipate a saving of £600m by 2020 in savings to consumers and £2.3bn in savings to consumers by 2035.”
Considering if you want to be a part of DSR? It can be a daunting process, so we’re here to help and give you guidance should you need it! The energy market is constantly changing, advances in technology means the industry is turning from a centralised to decentralised system- future proof your business by being at the front of the change.