If you’ve visited any of the big energy exhibitions and conferences recently, you may have been overwhelmed by the number of vendors offering ‘Energy Management’ solutions. It can be difficult to see the wood for the trees, especially when there are so many different technology solutions on offer. Before even looking at the technology, it’s important to understand what exactly you want to achieve, with the assets you have and want to manage.
Profiting from energy management
Businesses looking to profit from energy management solutions have a number of challenges to overcome. Not least of these is trying to understand how to make the most of the potential for generating income, whether that’s peak-charge management, access to ancillary service revenues, capacity investment deferral or simply the cost-benefits of guarding against power outages by having a reliable backup supply.
The growing popularity of demand side response (DSR) is enabling a far more flexible energy infrastructure. It is also encouraging industrial and commercial businesses to work with demand aggregators to generate new streams of revenue by managing individual machinery or processes to adjust the load drawn by the site.
While aggregators can reduce power demand significantly by shutting down energy-intensive processes, in many cases, businesses can only make minor adjustments to their processes. For example, reducing the speed of motor operation rather than turning off completely, or partial shutdown of a few assets in turn, rather than all assets together. This restriction limits the extent to which businesses can achieve power flexibility, even from large sites and assets.
In our experience, some businesses that could profit from reactively managing their assets are put off by the potential interruptions to their normal business operations. This is an issue because the timing of the flexible response is as important as the magnitude (kilowatts) of the response. For example, the ability to reduce demand during peak winter charging periods is more valuable than removing loads during summer. These practical limitations to participating in DSR also restrict a business’s ability to generate income from such an approach to energy management.
Overcoming DSR limitations
Energy storage – especially when implemented using batteries – overcomes these DSR limitations by providing a separate source of flexibility, distinct from any associated processes or machinery. Rather than trying to work around critical business processes to implement DSR, a business can match the level and duration of new flexibility to the requirements of their site and the anticipated return on investment. Day to day use of energy storage has a negligible impact on business operations and processes, unlike typical DSR activities.
Storage provides exceptionally fast response times and can reduce the overall flexibility needed by the system operator to mitigate changes in system frequency. Traditionally, grid balancing is a carbon-intensive process. The use of energy storage lowers both costs and emissions.
There is added value to be had from deploying energy storage rather than DSR. Energy storage when implemented in the correct systems structure can offer the provision of clean backup power supply, which DSR cannot. Furthermore, the cost of using energy storage does not need to involve significant capital outlay, particularly when considering the availability of fully funded solutions. Purchasing a system outright is not the only way to adopt energy storage. Financing options are now widely available that reduce or eliminate capital expenditure.
Energy storage provides constraint management services without impacting business operations and can help utilize on-site renewables, which for some businesses is core to their corporate social responsibility goals.
The flexibility schemes that the UK’s National Grid makes available to businesses for generating additional revenue can and do change as it strives to balance the needs of managing the electricity supply while offering value for money to consumers. The use of storage by the right operator can help future-proof a business’s ability to participate in new and innovative schemes.
Overall, compared with DSR, storage is a more reliable and robust way of providing flexibility for critical applications, such as grid stability and network security. Energy storage, when intelligently managed, offers significant benefits to both grid operators and industrial and commercial businesses who are faced with juggling their energy management solutions to optimize income.
Whether you have the flexibility in your existing assets, or decide to add battery storage to boost flexibility, the final step is to decide how you will manage those assets. Early adopters of DSR looked to aggregators to operate their turn-down strategies from their network operations centres. This semi-manual approach, which involves making phone calls and sending emails, is fast being overtaken by the use of automated-dispatch using intelligent technology platforms that can optimize control of the assets to future proof and maximise revenue.
The need for flexibility on the grid has never been greater. More and more industrial and commercial businesses are looking to combine battery storage and automated control platforms to create energy management solutions that enable them to profit from this growing need for flexibility.
Nick Heyward is Head of Storage at Origami Energy. origamienergy.com