Recent news headlines about falling capacity in electricity generation and the growing risk of blackouts has shone the spotlight on the security of the UK’s energy supply. While it’s the market’s responsibility to ensure supply and demand are met, it is the responsibility of National Grid to ‘fine tune’ the system to make sure supply and demand match second by second.

National Grid has many tools at its disposal to manage the network. One is to ask large energy users in the industrial and commercial sectors to reduce their electricity demand and pay them in return.

Demand Response of this kind has huge potential to help the UK improve its electricity security and it presents a win-win for customers too; providing a revenue stream from energy-intensive equipment and cutting CO2 emissions.

In March, Costain launched its COdemand venture which will deliver Demand Response solutions to our customer base. The first solution being brought to market, in conjunction with our partner Open Energi, is a new system known as Dynamic Demand that fine-tunes organisations’ power consumption and provides more flexibility for managing the electricity network.

As time goes on we will be offering new products under the umbrella of COdemand so I thought it would be useful to give an overview of the different types of Demand Response available. To understand how these work, it helps to know a little bit about grid balancing.

Keeping the lights on – a balancing act

For our electricity supplies to be maintained, it is vital that at any moment in time, the supply and demand for electricity are equal. An indicator of this is the grid frequency which National Grid must maintain at 50 Hertz. Too much electricity in the network causes the frequency to rise above 50 Hertz and could lead to equipment failures. Too little and the frequency drops below 50 Hertz, which could mean the lights go out.

National Grid manages this balancing act down to the last second, even monitoring when our favourite TV shows finish so that by the time we’ve walked to our kitchens to flick the switch on millions of kettles, the power is there. Grid balancing services help National Grid to manage this constant juggling act. Historically, it has ramped the supply of electricity from power stations up or down to meet fluctuations in demand but managing the demand for electricity from our businesses and homes offers a quicker, cleaner and more affordable approach.

Demand Response – what are the options?

There are four main types of Demand Response available in the UK to industrial and commercial energy users:

1 - Dynamic Demand can help National Grid when there is too much electricity as well as when there is too little. It works with a range of assets including boilers, motors, pumps, fans, air conditioning units and chillers and increases or decreases their electricity consumption in response to changes in grid frequency. The service is completely invisible, reacting automatically without interrupting service or impacting performance. It can be called on at any time and must be able to respond within seconds, but usually only for a few minutes at a time.

2 - STOR (Short Term Operating Reserve) is a service which National Grid calls on when there is a shortfall in electricity supply. Equipment responds to a signal sent by National Grid which turns it on (if the asset can supply power, such as a diesel generator) or off (if the asset consumes power, such as an industrial chiller). Equipment must be able to respond within 20 minutes and on average, will be used for around 1.5 hours.

3 - FCDM (Frequency Control by Demand Management) is also used to tackle supply shortages. It responds within seconds to a sudden, serious drop in grid frequency. FCDM is most suited to very large industrial assets where a relay can be installed to cut power to an entire site for 30 minutes, at zero minutes’ notice.

4 - Triad avoidance involves turning off assets during the afternoon/early evening on occasions when winter peak periods are expected to occur, to avoid an increased cost penalty. Nobody knows in advance when a Triad period will take place but historically they have occurred between November and February during weekday afternoons/early evenings.

A changing energy mix = a growing market

With more nuclear power on the way, and continuing investment in wind and solar, you may think the UK’s requirement for Demand Response should fall, but in fact the opposite is true. Together nuclear power and renewable energy make the supply side of National Grid’s balancing equation harder to manage. Nuclear plants cannot be ramped up and down in the way that a gas or coal-fired plant could and are operated at a steady but inflexible output and renewable sources such as wind and solar are inherently unpredictable. As a result, demand for grid balancing services is expected to increase by 25% by 2020, putting huge pressure on prices in what is currently estimated to be a £1billion market.

*This data is an estimate based on historical usage and provides no guarantee of the frequency with which National Grid will use the service in the future.