It’s easy to take the reliability of our electricity supply for granted. We flick a switch and the lights turn on. But dependability requires an orchestrated collaboration of management. In fact, to ensure our electricity system stays up and running, National Grid already spends more than £1 billion a year on balancing services, and has forecast that investment could reach £2 billion within five years. As renewables make greater contributions to our energy mix, balancing the grid is more challenging than ever.
Balancing services are just one of the resiliency measures that National Grid implements. In the worst case, National Grid must ensure it has plans in place to ‘black start’ the entire GB system to restore power in the unlikely event of the whole grid coming down. National Grid is responsible for ensuring that energy supply matches demand in real time, such that the frequency remains balanced at 50Hz, plus or minus 1%. To balance the system, it must deliver sufficient capacity, including a capacity margin to guard against potential shortages of electricity.
In tandem with National Grid, district network operators (DNOs) are responsible for supplying sufficient power into an area to meet their customers’ requirements, as well as maintaining stable voltage.
Despite the resiliency measures that National Grid puts in place, power cuts can and do happen for all kinds of reasons. Increasingly, businesses are interested in taking resilience into their own hands by understanding the likely modes of power failure and what they have to do to improve resilience for their own sites.
As well as resilience against grid power failures, industrial and commercial businesses are interested in predicting equipment failure so that they can take action before a key process fails.
Some “mission critical power” organisations, like hospitals, have a clear emergency imperative for site resilience where people’s lives literally depend on having reliable power at all times of day and night. Similarly, data centres need high levels of business continuity, ultimately driven by their service level agreements with customers. In addition to the emergency and ‘digital infrastructure’ scenarios above, we are seeing high levels of interest in resilience from manufacturing businesses in certain geographical regions prone to voltage variations, where process failure results in lost production. For example, extreme variations in voltage can cause paper mills to lose calibration and break the paper roll, incurring production losses.
For all of these situations, given that the grid is becoming increasingly intermittent as we move to an energy system progressively underpinned by renewables and storage, there is widespread recognition of the benefits of improving resilience by taking measures behind the meter – either directly at the customer site or by co-locating assets with the site.
Increasingly, C&I businesses want a holistic solution for resilience; which means tackling both grid failure modes and equipment faults. Our aim is to use the on-site assets to implement grid resilience. To do this, GridBeyond devises an architecture, specifying the asset parameters, intelligent control technology and additional sensors required to monitor equipment, translating the data to automate demand, and provide clients with a window into their energy usage via a state-of-the-art dashboard.
While there are certain commonalities across industrial scenarios, in practice every site is different. Some sites might have embedded generation, combined heat and power (CHP) or standby generators, which can all be leveraged for balancing. More recently, there’s a growing interest in battery storage – not just to support resilience, but also because of the increased flexibility that batteries offer to businesses.
In energy terms, flexibility means having the ability to adapt to changes in the electricity system. For example, during times of peak grid demand, businesses are using battery energy storage systems to reduce their demand on the grid. This behind-the-meter flexibility enables businesses to avoid peak electricity charges, as well as mitigate against high non-commodity charges, which is especially important for businesses that are high energy consumers. These non-commodity costs include Transmission Network Use of System (TNUoS or Triads) charges, which are determined by measuring consumption during Triad periods; Distribution Use of System (DUoS) charges and capacity market service charges. Businesses can reduce these charges by switching from the grid supply to use power stored in on-site batteries at peak times.
Battery energy storage systems also give businesses more flexibility to generate income by providing ancillary services to National Grid, such as DSR.
While prices are coming down, batteries are still relatively expensive and prices aren’t falling as fast as many vendors predicted. The main barrier to widespread adoption has been the difficulty in making a decent return on investment from investing in storage. Many investors believe it’s hard to make a business case for using batteries on their own when it depends purely on the revenue from the grid.
By taking a ‘hybrid’ approach and combining an advanced DSR platform technology with battery storage, additional use cases are created, offering a growing number of benefits for industrial energy users. These include the ability to deliver much higher revenue to customers, which significantly improves the return on investment case for battery storage.
There will be a steady growth in energy storage as it’s definitely needed, but it will be driven by fundamental economics and good business models – like the hybrid model with DSR. Today, it costs anywhere from £600,000 to £800,000 to install a megawatt battery, and you can’t get contract certainty from National Grid. Without DSR, batteries are a speculative investment with a multi-year payback time.
Many take the attitude that the technologies behind the smart grid aren’t really relevant to them. However, with National Grid and Distribution Network Operators (DNOs) increasingly providing specifications for failure modes we are seeing more and more forward-thinking businesses take on board the benefits of implementing smart technology for on-site resilience, as well as enabling them to participate in grid balancing schemes through DSR.