Factories Set to Take on U.K. Power Plants With Flexible Demand

  • Flexibility seen more important than efficiency, Ofgem says
  • Demand-side response can be used for half of grid balancing

Having the flexibility to turn power use up and down may become a critical part of the U.K.’s electricity market, with factories and supermarkets set to replace big plants in the role of keeping the network balanced, according to Britain’s energy regulator.

“There is real value in flexibility that is going to increase by an order of magnitude,” Andrew Wright, a partner for energy systems at the U.K. Office of Gas and Electricity Markets, said at a conference in London. “Flexibility will become more important than energy efficiency, it will be the most important.”

When power demand is high, National Grid Plc can either reduce consumption by paying companies to cut their use of heating and cooling systems, fridges and water pumps, or increase supply by getting power plants to start up. The grid operator wants so-called demand-side response to be used for 50 percent of what’s needed to balance the grid, up from 15 percent now.

A potential 750 megawatts of flexible demand, the equivalent capacity of a nuclear power station, can be reduced at peak times, according to Open Energi Ltd., which provides systems that allow companies to adjust power use. National Grid has contracts for about 100 megawatts of demand that can be cut, and about 1,900 megawatts of supply agreements from smaller generators including diesel and gas.

New Markets

Ofgem wants to ensure that contracts with National Grid aren’t the only way consumers can cash in on variable demand, and may introduce marketplaces for buying and selling flexibility, location or time.

National Grid is running a program to increase demand this summer, asking users to boost consumption when there is a lot of power supply from wind or solar at weekends, overnight or on national holidays, according to Cordi O’Hara, director of U.K. market operations at the network. About 200 megawatts has been contracted, two-thirds of what was offered, and National Grid has already called on participants three or four times, she said.

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