National Grid has awarded 12 companies tenders under a new pilot scheme, which will see them paid to use energy during peak generation periods this summer.
The Demand Turn Up scheme has procured 309MW of capacity from the 12 companies and will run from 1 May 2016 to September this summer. Peak periods of expected generation, mainly from solar and wind, have been identified during that time frame.
Companies involved in the scheme must submit electricity load plans to the National Grid and specify processes they will be running, guaranteeing their availability to ramp up demand during peak generation windows.
National Grid is to pay those companies a £1.50 per MWh availability fee during those windows, however they will also receive payments of £60/MWh, £75/MWh or an agreed upon price above that figure if instructed to use more electricity.
National Grid stressed that the most economic and efficient option would be instructed first, and any payments made above £75/MWh will not receive the availability payment.
Speaking to Clean Energy News, a National Grid spokesperson said that interest in the scheme had been high and 21 expressions of interest were received.
“Demand Turn Up is about using energy efficiently and by using solar energy to run essential processes when it is plentiful the scheme helps to reduce demand on the transmission system at other points throughout the day,” the spokesperson added.
The spokesperson also said that given the interest in the scheme, should it prove successful Demand Turn Up could be increased next summer.
However the Association for the Conservation of Energy stressed the need for National Grid to design the mechanism properly.
“Incentives to encourage load shifting can increase the efficiency of the electricity system as a whole and for this reason are to be welcomed. However, it is important that National Grid design the scheme carefully to ensure that it achieves the aim of shifting load without also in any way incentivising any energy waste,” she said.
