REstore wins landmark £6-Million DSR contract with National Grid
The Times - 14 June 2016
Demand-side response (DSR) provides an opportunity for consumers to play a significant role in balancing the electricity grid by reducing or enhancing their usage for very short periods in response to instructions sent by National Grid. In return, consumers receive significant cash payments.
In late-2015, National Grid’s chief executive Steve Holliday announced the power network intends to have 30 to 50 per cent of its grid balancing services provided through DSR by 2020, with more than 50 per cent by 2030. Such a strong and immediate target changes the game for DSR and potentially the future of the UK energy market. The target says the UK is serious about using new ways of providing power as and when it is needed.
REstore is one of the main technology players in this field and the market leader in providing such services to National Grid in the UK. It recently won the largest DSR contract in the UK’s FFR (firm frequency response) auctions, at 48 megawatts and worth £6 million. REstore co-chief executive Jan-Willem Rombouts and Louis Burford, who heads up REstore’s UK operation, describe how the market is changing.
“What DSR manages to do is solve structural problems in the UK energy market,” says Mr Burford. Large energy utilities have been hit by a perfect storm, especially in Europe – energy producers are making losses as thermal power plants are ‘out of the money’, while energy suppliers are trapped in low-margin commodity sales.”
Now, however, cutting-edge software, complex algorithms, improved forecasting and an internet of things approach to managing assets have combined in such a way that new downstream activities such as DSR can be provided.
REstore’s FlexPondTM platform connects to thousands of sensors in industries and buildings to provide data from equipment such as arc furnaces, cold stores and air conditioning units, turning them into smart devices which can react instantly to the changing balance of power on the grid and free up capacity on the network.
Mr Rombouts points out that the patented FlexPondplatformis based on respecting industrial process conditions. He says: “At the heart of our cloud-based platform are industrial loads with strict boundary conditions – operational boundaries such as maximum temperature, minimal pressure levels or volumes of intermediate stock that need to be met at all times, otherwise activation won’t happen.”
There is a reason why REstore has a Europe-wide DSR pool of 1.5 gigawatts, of which 500MW are constantly available at 98 per cent. The company has deep understanding of industrial processes, with team members harking from Honeywell, SSI Steel, INEOS, BASF and elsewhere. It also deploys a network of former plant managers in order to identify flexible power on the shopfloor.
One of the challenges for aggregators, transmission system operators and power utilities is there are many perceived risks around DSR among plant and facility managers. However, in reality, DSR is a way to earn money, minimise energy costs and reduce CO2 emissions. Basically, companies get to do good and make money, but that does no one any good if the operators think it’s too good to be true.
UK energy transition requires consumption increasingly to be responsive and flexible. For many years, REstore has been the leader in encouraging consumers to take steps in that direction.
Today, REstore launches a three-month project to recruit large industrial and commercial consumers to participate in its £6-million DSR initiative together with National Grid. “We’re just looking for the right commercial and industrial electricity consumers to share the multi-million-pound cheque with,” says Mr Burford.
Three myths about DSR
Myth 1 : That an industrial user or manufacturer has no flexibility in its systems.
Reality : Most systems have flexibility, even if only in the parameters within which they effectively operate. For any large organisation, operating across ten to fifteen sites, there is likely to be significant flexibility. Some 250MW has been identified in London alone, enough to replace a peaking power plant. Organisations can earn seven-figure sums in a year simply by taking advantage of such flexibility and with no impact on output.
Myth 2 : Loss of control over production process.
Reality : The calls for DSR through REstore’s FlexPond platform are controlled by the boundary conditions set by the business. If a certain system cannot go below a certain temperature without affecting production, it never will. In fact, it’s worth noting that the average call for turn-down is three minutes, with no call longer than five minutes – not long enough to affect the temperature in a fridge if you turned it down that long with the door closed.
Myth 3 : That DSR could impact productivity.
Reality : All systems have inherent flexibility built into them – there are natural buffers in any system and if sufficient attention is paid to the limiting factors, then platforms such as FlexPond manages all the intelligence in real time.
Not only are there genuine benefits for commercial and industrial consumers, but the response times for DSR are far faster than traditional generation. DSR achieves responses to calls for power in less than 30 seconds, regardless of total power volume, faster than a spinning combined-cycle gas turbine. This means that as it spreads, DSR can begin to help balance demand and supply in real time.