October 17, 2016

17/10/2016: The balance of power

Lucrative ‘power balancing’ schemes can help the milling and grain industry unlock long-term revenues of £90,000 per Megawatt from National Grid or EirGrid

by Michael Phelan, CEO at National Grid and EirGrid Aggregator, Endeco Technologies

Many in the milling and grain sector may be unaware that there is a significant new revenue stream available to progressive and forwardthinking mills. It focuses on the use of energy, and how by turning the power down for a relatively short period each year in line with National Grid’s and EirGrid’s requirements, companies can enjoy considerable and long-term financial rewards.

High Energy Consumption

The milling and grain industry is by its very nature an intensive user of energy. In flour mills, energy-using equipment as such roller mills, purifiers, sifters, fans and conditioning kit is commonplace.

The equipment found in animal feed mills – such as pellet presses, steam boilers, grinders and fans is equally as energy-intensive. Unfortunately this level of intensive energy use across industry represents a problem in the power sector, where only the most oblivious will be unaware that there exists a somewhat precarious electricity supply situation.

According to a Guardian newspaper report earlier in 2016, UK electricity demand is expected to outstrip supply by over 40% within 10 years.

Financial opportunities for energy-intensive businesses
Many thought renewables would deliver the answer, but in reality the inflexibility of renewable energy sources in conjunction with the difficulty of controlling grid stability in realtime, represents a major challenge for grid operators.

In simple terms, when generation and energy demand are imbalanced, a change of frequency in the grid system occurs, which is made worse by the intermittent nature of wind and solar sources. The requirement for quicker grid balancing and frequency is why the system operators (National Grid (in the UK) and EirGrid and SONI in Ireland) now offer a number of opportunities for energy-intensive businesses, with very lucrative rewards for those able to offer real-time response.

Ofgem, the industry regulator, is also on-board, recently laying out five priority areas of focus, central to which is a pledge to make the UK energy system more flexible. With this in mind, Ofgem is actively encouraging businesses to engage in demandside response.

Demand-side response
Firm frequency response (FFR) and the new Dynamic FFR, as well as the forthcoming (2017) Enhanced FFR, are schemes that all form part of the system operators’ broad DSR (Demand Side Response) suite of solutions.

In essence, these schemes involve removing sufficient load from the grid to stabilise frequency. To help boost uptake, the National Grid and EirGrid are offering those that participate the potential to earn extra income from assets by adjusting power consumption in real-time.

As a result, grid operators can reduce the requirement for coal and gas-fired reserves to be ready to supply power at short notice.

Earn up to £90,000 per megawatt
This is where the milling and grain industry can accrue significant financial rewards. To provide an indication, in the UK sums of up to £90,000 are currently achievable for every megawatt (MW) of average onsite energy consumption turn down.

In Ireland, the latest scheme – DS3 System Services – also offers very significant sums per megawatt. Any mill expecting to endure weeks if not months of blackouts to see financial savings on such levels would be wrong. In the first instance, the requirement is for ‘turn-down’ not ‘turn-off’, and secondly, the sums stated are in return for around 10 (on average) ‘turn-down’ events per year, lasting for a maximum of just 30 minutes each.

In total, this adds up to – on average - around 5 hours a year. For those thinking there must be a catch, there isn’t. The grid operators are prepared to pay such high rewards as it is obliged to control frequency within the limits specified in the ‘Electricity Supply Regulations’, i.e. ±1% of nominal system frequency (50.00Hz) except in abnormal or exceptional circumstances.

It must therefore ensure that sufficient generation and/or demand is reserved in automatic readiness to manage all credible eventualities that might produce frequency variations. 

Read the full article HERE.

The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine GFMT
which is published by Perendale Publishers Limited.

For additional daily news from milling around the world: global-milling.com

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