Water utilities could create £20m a year clean profit from power-hungry equipment and save more than 450,000 tonnes of CO2

Posted: Thursday 9th October 2014

”Invisible” Demand Response could transform the £900m annual energy bill of British utilities into new revenues.

Figures released by Open Energi show the rising importance of Demand Response as a “win-win” for protecting the UK power grid, whilst simultaneously creating revenues of £1bn a year for large energy users, including up to £20m for water utilities, by redirecting their unused energy capacity to meet demand.

By turning equipment, including water pumps, aerators and fans into smart devices for balancing supply and demand across the network, UK firms can earn revenues equal to 5% - 10% of their energy bill in return from National Grid. Dynamic Demand works by making invisible adjustments to the energy used by a wide range of equipment to free up unused capacity in the form of stored energy.

Ged Holmes, Commercial Director, Open Energi said:

“Water utilities are leading the way by using Dynamic Demand to minimise the environmental and financial costs of their energy-intensive assets; while simultaneously generating new revenue. This is a growing market and with £1bn on the table other industries are already following suit.”

Dynamic Demand is the fastest form of Demand Response available; it typically responds to balancing requests from National Grid within two seconds. This means it has an invisible impact upon the business operations of the firms that use it.

Following a successful trial, water company, United Utilities is now rolling out Dynamic Demand across its whole North West operation, with 10MW being available within the next 12 months. Over the next five years the company expects to have a total of 50MW of flexible capacity to offer to National Grid – the equivalent of a conventional power station. This will reduce carbon emissions by 100,000 tonnes per year and generate around £5m in revenues.

Andy Pennick, Energy Manager at United Utilities, said:

"Water and wastewater treatment is a really energy intensive process – power is one of our biggest operating costs – so we're looking both inside and outside our business to see how we can work smarter. That means using less power and being willing to be flexible in the way we use that power."

The water industry is the fourth most energy-intensive industry in the UK, emitting an estimated 5 million tonnes of CO2 annually: equivalent to around 3% of the UK’s total greenhouse gas emissions. Dynamic Demand could save more than 450,000 tonnes of CO2 per year from the water industry alone by displacing fossil fuel-fired power stations.[1]

National Grid has used Open Energi’s Dynamic Demand technology since 2010 to aggregate the electricity use of major energy users, such as United Utilities, the Canal & River Trust, and Aggregate Industries which helps to balance the grid and free up capacity. The larger the scale of commerce and industry’s involvement in demand-side aggregation, the better equipped the UK will be to meet our energy needs without relying on fossil fuel-fired power stations.

Open Energi estimates that, in total, the 5,400MW balancing market[2] can generate £1bn annual revenues for the UK’s large energy users from Dynamic Demand.

Open Energi’s technology is installed within equipment controls which constantly measure electricity consumption and monitor grid frequency. If frequency is imbalanced (deviating from 50 Hertz) the system temporarily adjusts the equipment’s power consumption up or down to help balance the grid. More than 90% of all switches made during the last three years of service have been for a period of 5 minutes or less, with 50% lasting for 2 minutes or less.

An additional benefit of Dynamic Demand is that it provides utilities with insight into energy use and equipment performance across their entire estate.

Currently, the majority of grid balancing is supplied by switching on gas and coal-fired power stations to increase supply, yet managing demand instead can help to maximise the use of existing system capacity. National Grid’s use of Dynamic Demand uses internet intelligence to increase grid efficiency and reduce its reliance on “peaking power” providers, which cost between £15-20/MWh. In doing so, Open Energi estimate that Dynamic Demand could save National Grid around £40 million over the next 10 years.

Additionally, Open Energi forecast that by 2020 demand response could save National Grid £1.1bn[3] by reducing investment in new transmission and generation infrastructure, since every MW provided by Dynamic Demand frees up 2 MW of capacity elsewhere on the system.

In total, by avoiding grid modernisation and peaking power costs, Open Energi estimates that Dynamic Demand could save £1.12bn by 2020.

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