Connecting your business to the smart grid:

for revenue

for reliability

for the environment

Flexitricity brings new revenue and increased asset reliability to UK businesses,

while reducing carbon emissions and risk in the national electricity system.

Flexitricity uses Britain's most advanced smart grid system to unlock the hidden

flexibility of commercial energy users and small generators.

With Flexitricity, energy users are earning revenue now, by helping secure

electricity supplies and supporting the renewable energy revolution.

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5Demand on the nationalelectricity supplysometime pushes thesystem towards capacity.

This data centre hastemporarily opted out ofthe Flexitricity smart grid inorder to carry out essentialmaintenance.

This supermarket hasautomatically turned off non-essential air-conditioning systemsto reduce electricity demand.

Short Term Operating Reserve (STOR) isused to provide extra electricity forshort periods.

Electricity provided by Flexitricity’ssmart grid keeps the electricitysystem stable through the peak.

With Flexitricity’ssmart grid availableto National Grid,fewer coal powerstations have to bekept on hot standby.

Flexitricity’s rapiddelivery of energycan be used tobalance fluctuationsin renewable energygeneration.

National Grid calls onFlexitricity’s smart gridto contribute electricity

into STOR.

This CHP generator has switched onspare electricity generating capacity,and is sending excess heat to athermal store.

This call centre is running itsstandby generators, coveringits own demand andsupplying excess into thedistribution networks.

This cold storage facility hastemporarily turned off itsrefrigeration systems – whichwon’t affect stored produce.

This facility has automaticallytaken itself off-grid using itsown standby generators.

This factory has automaticallydelayed a non-critical processto reduce electricity demand.

www.flexitricity.com 0845 223 5334

How Flexitricity helps yourbusiness

Most businesses are sitting on untapped

sources of revenue, in their standby

generators, electricity consuming

equipment, combined heat and power

(CHP) generators and hydro generators.

Flexitricity provides companies with

access to this revenue, which can

exceed £100,000 per annum on a single,

medium-sized industrial site.

Flexitricity’s smart grid communicates

directly with electricity generating and

consuming equipment on clients’ sites

via secure connections. This allows

Flexitricity to increase generation and

reduce consumption during short periods

of stress for National Grid – a valuable

service which helps stabilise electricity

supplies. The company’s patented

technology and continuous service

monitoring ensure that normal core

business operations have priority at all

times, while critical standby assets

become more reliable through regular

testing.

Flexitricity’s system works within the

client’s existing electricity purchase

arrangements and, in most cases, with

the equipment which is already on-site.

Why Flexitricity?

Flexitricity Ltd created and now operates

the first, largest and most advanced

smart grid system in the UK – bringing

revenue to UK businesses, reducing

national CO2 emissions and helping to

secure energy supplies.

The company was established in 2004 to

develop new ways of addressing the

short term balancing requirements of the

national electricity system. Working with

an enviable blue-chip client base,

Flexitricity has become the country’s

market leader in aggregated demand

side management, winning awards for its

team and technology along the way.

Flexitricity’s smart grid provides Short

Term Operating Reserve (STOR) – the

most important category of fast-acting

generation or demand-reduction capacity

– which is held ready for National Grid, to

keep the electricity system stable during

times of system stress. Flexitricity’s live,

operational service is available every day

to National Grid.

Full parallel

STOR Standby generation

Energy security

Combined heat & power

Triad

Flexible generation

Smart grid

Load management Renewables friendly

Asset reliability

New revenue

Energy partnering

Short term parallel

Reduced carbon

Working with Flexitricity delivers:

New revenue from existing assets: National Grid pays

Flexitricity to hold reserve available, and makes further

payments when this reserve electricity is required. Flexitricity

shares these payments with clients, who own the assets

Flexitricity uses. This turns assets which had previously been

cost items into direct revenue generators.

Improved asset reliability for your business: Standby

generators need to be run regularly ‘on load’ to ensure that they

are capable of providing reliable emergency power. Generators

which are only tested ‘off load’ have an unacceptably high

likelihood of failure when they are needed most. With Flexitricity,

all running is on load. All assets connected to Flexitricity’s smart

grid are monitored remotely and clients are informed

immediately of any on-site concerns.

Reduced CO2 emissions: Every megawatt of capacity

connected to Flexitricity’s smart grid is a megawatt that does not

have to be held in reserve elsewhere. This reduces the need to

keep coal and oil stations on hot standby or running inefficiently

at part load – this reduces emissions by between 300–700

tonnes of CO2 per annum, for each megawatt provided.

Wider adoption of renewable energy: Some types of

renewable technologies can only generate electricity when the

weather permits. Electricity supply and demand must be kept in

constant balance, so variations in renewable generation need to

be matched by turning other energy generators up and down, or

by altering demand. Flexitricity combines small, controllable

generators and flexible electricity loads, to create a low-carbon

source of balancing electricity to respond to variations in wind,

wave, tidal and solar generation.

www.flexitricity.com 0845 223 5334

UK carbon commitments might seem

ambitious now, but there’s much more to

come. Business energy users who are

smart about their electricity use and

generation are better placed to benefit

from the drive for ever higher energy and

fiscal efficiency. Working with Flexitricity

makes sense today and is a prudent

approach to the changes in energy policy

and economics which many are

predicting.

Flexitricity’s answer to a nationalchallenge

Electricity consumers don’t ask

permission every time they turn on a light.

Large power stations can fail suddenly

and wind turbines can only generate when

there’s wind. This means that National

Grid must always keep something in

reserve to keep the electricity system in

perfect balance as both supply and

demand vary.

A large volume of reserve always comes

from part-loaded fossil fuelled power

stations, even though it is inefficient to

burn gas and coal at part load. Additional

reserve is provided by warming older coal

and oil power stations, which can take

twelve hours or more. Often, this reserve

is not needed in the event and the stations

are switched off without generating

anything.

It’s more efficient for electricity users and

small generators to provide some of the

flexibility that National Grid needs to

balance the system – this is where

Flexitricity comes in. Standby or CHP

generators, or opportunities to reduce

load for a short period, don’t emit CO2

when waiting to be called-upon, and

Flexitricity’s smart grid can access them

extremely rapidly if needed.

The Flexitricity smart grid

Flexitricity monitors the status of clients’ equipment from its

Edinburgh control room. If a national demand peak is higher

than expected, or if a large power station or interconnector

fails, Flexitricity receives an electronic instruction from

National Grid. Flexitricity’s smart grid system then

communicates directly with clients’ equipment via a

Flexitricity outstation located on each site, starting generation

or turning down consumption within minutes. This delivers

reserve energy to the system and gives National Grid time to

put other measures in place.

On most sites, Flexitricity restricts delivery to a maximum of

130 minutes. All sites can ‘opt out’ manually or automatically

if they need to, and Flexitricity doesn’t attempt to use any

site where a problem has been detected.

Corporate social responsibility

By working with Flexitricity, UK businesses can demonstrate

to their stakeholders that they are using their assets in the

most cost-effective and environmentally beneficial manner.

Flexitricity uses small generators and flexible electricity loads

to reduce both costs and carbon emissions for everyone.

Flexitricity’s smart gridmakes business greenerEnvironmental demands on business areonly going one way – up

Short Term Operating Reserve (STOR)

is one of National Grid's most

important tools for securing the

national electricity system in real time.

Under the STOR arrangements,

National Grid pays a ‘rent’ (termed

availability) for STOR capacity, and

pays a usage charge (utilisation) when

the reserve is needed, such as during

demand peaks, or when large power

stations fail.

STOR is a year-round service,

potentially available to National Grid on

a 24 hour basis. For most of

Flexitricity’s client businesses relatively

low utilisation hours are targeted using

the STOR pricing strategy, so that the

bulk of the clients’ revenue is normally

earned from availability payments.

Availability is paid during key ‘windows’

set by National Grid. These windows

vary seasonally, but currently fall within

the period 07:00 to 22:30, and amount

to roughly 11 hours per day. Most

STOR utilisation occurs within these

windows.

The STOR market has been growing in

volume and value for several years, due

to the reduction of flexible coal and oil

electricity generation capacity, and the

increase in forms of generation which

require balancing, such as renewables.

Under typical terms (which can be

tailored) Flexitricity provides National

Grid with run times of up to two hours

per call, plus response time. Calls

typically last around one hour and

amount to approximately 50–60 hours

of running per year.

For standby diesel generators or gas-

fired CHP generators, STOR is the

largest incremental revenue

opportunity, with the lowest relative

impact on generator run hours, and the

lowest exposure to fuel price risk, of

any premium energy activity.

Where does the revenue come from?

Short Term Operating Reserve

www.flexitricity.com 0845 223 5334

The triad system is more familiar than

STOR to most energy managers and

energy purchasers. STOR and triad

management may be operated together

within certain constraints. Triads are a

method whereby the Transmission

Network Use of System (TNUoS)

charges are distributed between

electricity suppliers, who recover them

from electricity customers. These

charges are known as ‘triad charges’,

and should be shown explicitly on

electricity bills. Triad charges are

proportional to the client’s electricity

demand at the three highest national

system peaks in any winter (November

to February). These peak half-hour

periods are known as ‘triad periods’. If

clients reduce demand during these

peaks, they will reduce their triad

charges proportionally. Triad periods

are not known in advance, but can be

forecast, as they typically occur

between 4.30pm and 6.30pm on

weekdays during cold weather.

Flexitricity’s triad management strategy

involves careful targeting of generation

and demand reduction to the periods

which have a high likelihood of being

declared the triad periods for that year.

When a triad is considered likely,

consumption is reduced for up to two

hours. This generally occurs on 15–25

occasions per year. It is necessary to

opt out of STOR for selected winter

weekday evenings when triad

management is conducted. In most

locations, the benefits for operating

triad management outweigh the

reduction in STOR availability

payments. Flexitricity manages this

crucial interaction in order to maintain

quality of service and maximise

revenue.

Triad management

Other services

Some sites are capable of providing

specialist services in addition to, or

instead of, STOR and triad management.

At the same time, new opportunities are

emerging to sell electricity balancing

services to distribution and energy retail

companies. Once Flexitricity is familiar

with a client’s organisation and sites, it

will identify those that could be of interest

to the client at the appropriate time.

1. Appraisal

Flexitricity conducts a detailed

appraisal of the client’s assets and

electricity consumption patterns. By

gathering technical data, performing

site visits and (where necessary)

speaking to the distribution network

operator, Flexitricity determines how

a client’s organisation can get the

most out of its energy consuming or

generating assets.

A well-informed business decision

is the goal of this process –

providing clients with the facts that

are needed to decide which sites

should progress. Challenges can

arise from electricity distribution

networks and with on-site logistics.

This is why the business benefit

must be quantified early in order to

maintain momentum.

2. Implementation

Getting the client’s equipment

connected and commissioned is

key to accessing new revenues. At

this stage, Flexitricity galvanises the

efforts of the client’s preferred

contractors, managerial staff, on-

site teams and third-party service

providers to navigate the

implementation stages. Flexitricity

also provides a customised

‘outstation’ for each site.

It is the momentum that results from

the appraisal stage that keeps

programmes on track. Flexitricity

has wide experience of the

challenges which arise during

implementation, and assists all

stakeholders in getting sites

connected to the Flexitricity smart

grid quickly.

3. Operations

Once a site is connected,

Flexitricity’s smart grid remotely

monitors the client’s equipment in

real time – checking the health of

generators and loads and

appraising the site’s capability to

provide reserve energy to National

Grid.

The system is fully automated –

Flexitricity’s smart grid control

centre is fully manned with

experienced engineers who are

available to deal with events,

exceptions or queries. Flexitricity

understands that core business

processes must always be

protected, so the system works only

within pre-agreed limits. The site

always retains ultimate control: the

client’s on-site team always has the

facility to withdraw the equipment

from the Flexitricity smart grid if

required.

4. Settlement

Every month, Flexitricity audits the

revenue received from National Grid

and pays the client. The majority of

the revenue comes from availability

payments, paid for the capacity

connected regardless of the number

of times that it is actually used.

When National Grid calls for

generation to run or loads to turn

down, further revenue is generated.

5. Tender cycles

The market price for STOR has

consistently been substantially

higher than the cost of operating

energy generating or consuming

equipment, even without

considering the regular income

which is paid regardless of how

much equipment is run. Regular

tender rounds ensure that changes

in market conditions can be

incorporated into future prices.

Flexitricity conducts detailed market

analysis in advance of each tender

round to ensure that each asset

type achieves the best net return,

within the constraints of normal site

operations.

6. Expansion

Flexitricity constantly looks for new

ways to increase revenue to clients,

by developing new products and

systems. By working in partnership

with clients, Flexitricity ensures it is

in all parties’ interests to maximise

the revenue obtained by existing

sites, and widen the range of

equipment able to participate in the

Flexitricity smart grid.

Working with FlexitricityThere are six main phases when working with Flexitricity:

1. Appraisal 2. Implementation 3. Operations

4. Settlement 5. Tender cycles 6. Expansion

www.flexitricity.com 0845 223 5334

National Grid has a growing need for flexible generators that

can respond more quickly than large power stations, and

without long, fuel-hungry start and stop sequences. Standby

diesel generators are ideal for this role, and can earn

substantial revenue while helping to secure the national

electricity supply.

Flexitricity uses its smart-grid system to turn standby

generators around the UK into an aggregated, low-carbon

source of reserve electricity for National Grid. In return,

generator owners receive several benefits:

• New revenue is earned using existing assets;

• The majority of the revenue comes from availability

payments, paid regardless of the amount of running, and is

therefore predictable;

• STOR running is typically similar to a good-practice

generator test and exercise regime, and substitutes many

elements of it;

• The reliability of the site’s emergency power supply is

dramatically enhanced;

• Flexitricity remotely monitors key aspects of standby

generator health.

Running a generator for Flexitricity directly contributes to the

generating equipment’s reliability, as it ‘exercises’ the

generator under loaded conditions, and eliminates damaging

practices such as off-load testing. Connecting these assets to

Flexitricity’s smart grid can significantly reduce the risk that a

standby generator fails to deliver during a power cut.

Flexitricity’s system is fully automatic, so our clients’ staff don’t

have to spend time looking after it; Flexitricity operators

constantly monitor equipment whenever it is available to

National Grid. Flexitricity understands that core business

processes must always be protected, so in a power cut a

client’s generators will supply the site as they should.

Standby generation Flexitricity’s approach to standby generators improvesreliability and turns “deadweight” assets into revenueearners.

Technical Information

www.flexitricity.com 0845 223 5334

Flexitricity is not just for electricity users. The company’s

award-winning innovations for small power stations are

designed to increase revenue while still maximising annual

generation.

Most combined heat and power (CHP) and tri-generation

stations are heat-led, generating their electricity when heat (or

cooling) is needed. This means that the electricity is sold on a

spill basis, which lessens its value. Opportunities to provide

reserve electricity to National Grid are also missed.

However, many heating and cooling networks possess either

natural thermal inertia, or heat stores. Flexitricity uses this

storage to maximise the value of the CHP electricity, while still

providing the same amount of heat or cooling.

It is well known that hydro power stations can be the most

flexible generators of all. However, small hydro stations are

usually unable to participate in flexible markets or reserve

services, purely because of size.

Flexitricity’s smart grid aggregates small CHP and hydro

generators, giving them the first opportunity to realise the

value of their inherent flexibility. Flexitricity respect the process

limits of small generators, and ensures that opportunities to

generate are not missed.

Built into a business case at the start, Flexitricity’s approach

can increase the viable size of CHP or hydro station for a given

site.

As well as increasing the revenue to the generator, Flexitricity

also enhances the CO2 savings that embedded CHP and small

hydro power stations already provide.

Combined heat and power(CHP) and small hydrogenerators

New revenue sources for independent electricitygenerators.

Technical Information

www.flexitricity.com 0845 223 5334www.flexitricity.com 0845 223 5334

Industrial and commercial electricity consumers can now earn

substantial revenue by helping to keep the national electricity

system stable, while carrying on with normal business.

Many processes – such as air conditioning, pumping, chilling

and heating – have some kind of natural inertia or energy

storage. By working only with these processes and respecting

their normal operating limits, Flexitricity can reduce load for

short periods when the national electricity system is under

stress. The processes then ‘catch up’ consumption during a

period of lower stress, and thus lower carbon, in the national

electricity system.

Because Flexitricity aggregates these loads using its smart

grid, even relatively small units – down to individual pumps or

compressors – can participate.

Interacting with a client’s critical processes requires great care

in order to preserve reliability, customer service and

operational ‘up-time’. Flexitricity’s rules for load management

ensure that core business is not disrupted. These are:

• Isolate the flexible elements – Flexitricity’s smart grid never

works with electricity loads that can't be interrupted without

disruption.

• Stay within limits – every process has business-critical limits

which it must not breach. These may be temperatures, tank

or stock levels, or any other critical parameters. If these

limits are approached, the equipment automatically takes

itself out of the smart grid.

• Provide an opt-out – site operators need to retain ultimate

control over site equipment. Every site participating in

Flexitricity’s smart grid has a manual ‘inhibit’ control.

• Automate end-to-end – unless clients require direct day-to-

day involvement, operational staff don't have to do anything

once a site is connected to the Flexitricity smart grid.

• Monitor – whenever your load is available to be turned down

by National Grid, Flexitricity operators are monitoring it.

Load management Small changes to consumption make a big difference.

Technical Information

www.flexitricity.com 0845 223 5334

Tel: 0845 223 5334 Fax: 0845 223 5417

Email: info@flexitricity com

© Copyright 2010 Flexitricity Limited. All rights reserved. Flexitricity and its associated logo are trademarks of Flexitricity Limited and are the subject of trademark applications or registrations

in various countries around the world. All other trademarks are the property of their respective owners. All Flexitricity products and services are subject to continuous development – we

therefore reserve the right to alter technical specifications without prior notice.