Monday, 25 April 2016

Demand side response - get paid to consume electricity

As of May 1st the National Grid will (occasionally) pay large consumers to increase their electricity demand to help balance the grid [1]. Consumers will get paid £1.50/MW/hr for being ready and up to £75/MWh for actually consuming electricity on demand (with as little as 5 minutes notice). £75/MWh works out at 7.5p/kWh - about half the normal retail price. This deal is not as crazy as it sounds because it will cost less than the alternative, asking power generators to reduce generation. That can cost up to £150/MWh.

The problem is not so much that we have too much intermittent renewable power - it is that we have too much embedded wind and solar that cannot be controlled. As of Feb 2016 there was 9.2 GW solar PV power connected to the grid, about a third of which are small installations that cannot be turned off when required [2]. This amount of PV means we now have very low demand on sunny summer weekends. Apparently Saturdays are even worse than Sundays. However PV is not the only issue - embedded wind power is also a problem especially on warm summer nights when demand is very low.

National Grid want consumers to increase their demand with genuine useful load, not just dumping the power somewhere. For example, you could use it to heat up a swimming pool. 1 MW for 3 hours would will heat an olympic size swimming pool by one degree C. National Grid say 'It is expected that the pricing of the service would make it more difficult for ‘fake’ loads to be economical, but this would also be verified at the contracting stage.' You still have to pay for the electricity you have used, so even if you paid as little as 9p/kWh (industrial users pay less than we do), you still pay 1.5p/kWh net.

To qualify for the contract you have to be able to use at least 1 MW for half an hour on demand. That is 55 times the average daily household consumption. Also most household supplies are limited to at most 25 kW. We are not big enough to take advantage of this deal.

However if you run a largish business or a factory you could consider an energy storage solution. In February BioSolar announced they are developing a new battery technology that could be as cheap as $54/kWh [3]. To store the minimum 0.5 MWh would cost about £19,000. Each time you used it you would get £30.00 and you might be called on 40 times in a year, so £1,200/a. Plus you could get another £2,200/a in availability payments - overall payback in less than 6 years. Hurry up BioSolar - we need you now!

[1] (scroll down to 'Demand Turn Up').
[2] Solar photovoltaics deployment (
[3] New “Super Battery” Energy Storage Breakthrough Aims At $54 per kWh (Cleantechnica) Feb 2016

1 comment:

  1. Presumably the reason National Grid doesn't invest in power storage itself is that it doesn't have the space/nous/capital/administrative capacity to do this. I can't help thinking it would be simpler and more reliable for the Grid and large generators to do this, but demand-side response is more in tune with the decentralise+devolve agendas.