National Grid has signed a deal with Belgian demand response company, REstore, to stabilise its power grid.
REstore will be assisting National Grid to make up to 100MW of capacity available so that it can be switched off within seconds to balance the grid. REstore claims to be able to save National Grid up to 100MW - the energy equivalent of taking 30,000 households off the grid or a gas-fired power plant.
During peak demand, National Grid will now be able to call on companies in the steel, cement, or water treatment industries to turn down non-essential equipment instead of switching on gas-fired power plants held in reserve. The portfolio includes a former Tata Steel site (now owned by Sahaviriya Steel Industries UK0, Barclays' real estate portfolio, oxygen and hydrogen manufacturer Praxair, and quicklime producer Lhoist.
The technology will also play a significant role in the integration of wind and solar power onto the power grid.
While some users are large enough to negotiate their own deals with National Grid, most consumers deal through an aggregator such as REstore. By selling this capacity to National Grid through REstore companies not only save energy, but also benefit from an extra revenue stream - some of the company's commercial and industrial customers net nearly £500,000 in annual payments, while others are able to cut their annual energy bill by 10%. In our article, Demand Response Participation-Good Business Sense for Industrial Facilities, we discuss the commercial benefits of being a demand response participant in the industrial sector.
For National Grid, ‘demand response' reduces the need for maintaining expensive ‘peaking' power plants.
Demand response companies will also be given the opportunity to bid for contracts to provide capacity in the government-run auctions which are set to launch in 2015.
Targeting “real demand”
According to Pieter-Jan Mermans, co-chief executive of REstore, the company targets "real demand" from machinery instead of focusing on taking back-up diesel generators offline. He explains that the deal will see National Grid increase the amount of Short Term Operating Reserve (STOR) from this pure demand by over 35%.
Mr Merman explains: "REstore focuses on real demand - machinery that consumes power. That's where there is still a lot of potential in the UK.”
The industrial sector offers unique opportunities because it is able to contribute significantly large amounts of load reduction – sometimes even from just one plant. As a result, large industrial or manufacturing sites have been considered the low-hanging fruit by demand response providers.
REstore already operates in the Benelux countries, but is aiming to expand further. Mr Mermans says that the company is considering expansion options in "other larger European markets". One such country is France which is looking to reduce the amount of baseload power it sources from nuclear. This of course opens up new opportunities for demand reduction.
Without effective demand response programmes, the European region will battle to realise the full potential of renewable generation [Read Engerati:Demand Response-Overdue in Europe], as well as meet energy efficiency goals.