Ensuring security of supply through flexibility

16th November 2016

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Agenda:

The role of flexibility in the future energy system

Understanding the value of flexibility

Opportunities for consumers with dynamic energy consumption

Integrating flexibility with procurement to ensure the best returns

Why act now?

Ensuring security of supply through

flexibility

Robert Owens

Vice President, Demand Side Management

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Flexibility is crucial to our future energy

system

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Tight power supply margins Sustainability targets

Security of supply Rising delivery costs

The value of flexibility is set to increase

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Source: Future Energy Scenarios, July 2016

Business opportunities in Demand Side

Response (DSR)

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Reduce costs by avoiding costly peak charges such as triad and red-band DUoS

Monetise the flexibility of your assets and take advantage of revenues that are available now

Strengthen your CSR credentials by becoming a more responsible energy user

Ensure security of supply for your business by becoming a smarter consumer

Prepare your business to take advantage of future opportunities for demand flexibility

Turning flexibility into a revenue creating

asset with the capacity market

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Live scheme to ensure security of

supply over the winter peak

Rewards customers able to offer

up commercial-size flexibility

For the auctions coming up this winter the Government have set out

to buy:

53.8GW in the early Capacity Market auction (January 2017),

for delivery in 2017/18.

52GW in the T-4 auction (December 2016), for delivery 2020/21

300MW of turn-down DSR capacity for 2017/18 in the

Transitional Arrangements auction in March 2017

Multiply capacity payments to see returns

of £70-£80 per kW

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£-

£10

£20

£30

£40

£50

£60

£70

£80

£90

£/k

W

Illustrative Savings for DSR Curtailment

(at Peak time) per kW

Non-Commodity

Saving

Energy Saving

Capacity

Market (TA)

£-

£10

£20

£30

£40

£50

£60

£70

£80

£/k

W

Illustrative Savings for DSR Shift

(Peak to Off Peak) per kW

Non-Commodity

Saving

Energy Saving

Capacity Market

(TA)

Customer case study

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Generator

running costs,

£1,091.50

Customer: Large consumer

goods manufacturer

No. of factories across the UK: 2

No. of sites providing DSR: 1

Total flexible capacity: 1,850kW

Back-up generation: 1000kW

Turn down DSR: 850kW

Capacity

market, £19.25

Energy saving,

£7.15

Non-

commodity

cost saving,

£61.45

0

10

20

30

40

50

60

70

80

90

100

£ p

/kW

Generator running cost,

-£16.20

£71.65 per kW per year

1,850kW = £124,885 per year

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Use your assets as ‘energy stores’ to

package flexibility

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Food storage

Sustain fridge/freezer

temperature

parameters

Data centres

Switch to back-up

generator

Manufacturing

Increase no. of

production lines

outside of peak

Retail

Adjust Heating,

ventilation and Air

Conditioning set points

Future proof your business against rising

peak costs

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0

100

200

300

400

500

2014 2015 2016 2017 2018

£/M

Wh

TNUoS

0

20

40

60

80

100

120

140

2014 2015 2016 2017 2018

£/M

Wh

DUoS

0

50

100

150

200

2014 2015 2016 2017 2018

£/M

Wh

Capacity Market

0.0

1.0

2.0

3.0

4.0

5.0

2014 2015 2016 2017 2018

£/M

Wh

CfD

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Integrating flexibility with procurement to

ensure the best possible returns

Regulated supply contract

Flexibility contract

Benefits of one company managing both:

Having visibility over both can help consumers make

optimal decision and ensure compatibility

Use the flexibility in the supply market to extract

additional value

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Act now…

Start the conversation…

Visit our stand (B45) to discuss the DSR opportunities for winter 2017/18

It’s easier than it looks The commercials

get stronger

Start now to realise

your flexible capacity

Thank you

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www.smartestenergy.com