A new deal between the UK’s National Grid and Asda will see the supermarket giant provide around 13MW of ‘virtual battery power’ from its air-conditioning and fridges. The agreement is just one example of how demand side response can play a vital role in rebalancing of the grid, but how does it work and should it be used more widely?
As the share of renewables in the UK energy system increases, so does the need for flexibility in the grid. To achieve this operational goal, the National Grid is more and more shifting its focus away from traditional energy providers to those outside of the sector.
Most recently, the UK’s third largest supermarket chain Asda announced it will use fridges located in 300 of its stores and 18 distribution depots to act as a ‘virtual battery pack’ to support the grid. When demand for electricity needs to be reduced to balance operations to avoid a blackout, energy to the fridges will be cut at short notice. This will free up 13MW of power from the grid – enough to power 8,500 homes.
Of the contract, Asda’s energy manager, Peter Smith, has said it was a ‘no brainer’, as the company can easily cut this electricity while keeping the temperature of its stores stable. Meanwhile, management of the service is entirely run by energy aggregator, Flexitricity. Therefore, with little effort, the supermarket chain will receive a new revenue stream and contribute to lowering its emissions. A no-brainer, certainly.
However, while this service, which is known as demand side response (DSR), is a win-win for both the National Grid and companies with energy intensive assets, industry insiders says it faces several challenges to expanding.
The importance of DSR
“Demand side response is making use of a resource that already exists,” explains James Sprinz, head of decentralized energy at BloombergNEF, “It’s using the inherent or latent flexibility that is already within the system.”
DSR works when energy aggregators, such as Limejump and Flexitricity, manage a pool of electricity users and small-scale producers, to, at sub-second response times, supply energy or reduce electricity demand, depending on what’s needed to balance the grid.
While most of the £1bn National Grid pays out in contracts through its energy capacity market is still awarded to power plants, those going to aggregated energy firms are on the increase.
In fact, last year, National Grid established the GB Balancing Mechanism Market to enable small generators, battery storage and DSR providers to compete with larger power plants to offer power and services to the grid. And this year, within National Grid’s control room, a new Distributed Resource Desk has been created to enable power system engineers to give instructions much faster to these providers.
National Grid reported that within the first 24 hours of operation, the number of bids and offers accepted by the control room from aggregated providers was 87MWh, up 113% on average.
In August, DSR operators, including Flextricity, provided vital support during a rare power cut across parts of the UK. When a combined-cycle gas turbine power plant and offshore wind farm tripped, Flextricity was asked to switch its battery charging aggregation into discharging, helping to fill in the power gap.
However, despite clear support from National Grid for more DSR to balance the grid, the UK market is growing less quickly than expected, says Sprinz. This is, he says, reflected in the fact that many DSR companies started as start-ups but, unable to continue alone, have been acquired. Kiwigrid and Limejump have both been bought-up by bigger market players.