Member Article

National Grid alert triggers wave of enquiries for renewables sector

Growing numbers of British businesses are looking to declare ‘energy independence’ to protect themselves from the rising threat of future blackouts, a new market update from renewable power expert UrbanWind has revealed.

Companies are increasingly looking at ways to protect themselves against the ‘energy trilemma’ of equity, security and environmental sustainability that the UK faces.

And it will lead to changing work patterns for employees in all industries, as businesses bring their energy costs down by working at ‘off peak’ times, UrbanWind’s latest update bulletin on the future of Britain’s energy supply sector reveals.

It is also predicting that energy supply companies will increasingly offer discounts for companies that have the capacity and ability to reduce their demand when asked to – something that was commonplace in the 1980s.

Tackling the growing ‘trilemma’ has moved high up the agenda in Britain’s boardrooms and UrbanWind says its research reveals procurement, energy efficiency and demand-side measures, such as altering the time of peak demand, or reducing reliance on grid-powered generation, are increasing in importance as businesses develop their energy strategies.

It says high-profile firms now have real ambitions to become 100 per cent reliable on renewable energy technology in the second half of the decade – with wind power, solar PV and combined heat and power leading the way.

UrbanWind’s ‘energy trilemma’ update bulletin was emailed to customers, following National Grid announcing earlier today in its 2014/15 Winter Outlook report that capacity to generate power this winter will be at a seven-year low, after a string of closures and breakdowns at UK power stations.

Paul McCullagh, CEO of UrbanWind, said: “Following National Grid’s latest outlook update, security of supply and keeping the lights on is now on everyone’s radar. Britain has the fourth best security of supply in the world today, but the question is: for how much longer?

“Demand-side measures are also becoming more critical to businesses, as they look towards ‘enlightened self-interest’ when it comes to their energy challenges.

“It includes switching off the power, switching energy-intensive work to cheaper off-peak times, combined with introducing more energy efficiency measures, on-site power generation - including solar and wind - and energy capture and storage for future release at expensive times.

“Companies are looking to see how they can best harness renewable technologies on-site, for example, creating electricity from wind power and storing it in batteries to use when needed.

“We are also seeing an increase in organisations and businesses using their back-up generation to allow them to opt-out of the national grid at expensive times in return for rebates and subsidies from the big energy suppliers. This trend will undoubtedly grow to become the norm, as it was in the 1980s.

“Proactive energy management strategies include a growing approach to embedded generation, fully meshed with in-house procurement that looks to give the company the best deals possible.

“We don’t believe that companies will totally opt out of the national grid, as they seek greater energy independence.

“Instead they will look to use renewable energy as a tool towards supply security, capping bills and reducing their carbon footprint.”

UrbanWind’s update also reveals the growing commercial pressures that exist to ‘get smart’ when it comes to energy usage.

That means training staff about energy-saving measures, turning idle plant off and moving power usage to cheaper periods away from times of peak demand.

That will lead to changing work patterns for many – with night and weekend working becoming more commonplace as a result.

UrbanWind is also forecasting that energy supply firms will introduce new and punitive premium rates for peak demand – which has traditionally been 4pm-7pm Monday to Friday from November to March. The measures will be needed to try to reduce the growing pressure of peak demand on the grid network.

UrbanWind says that the present debate about whether the lights will stay on this winter needs to be extended to take in the full impact of the ‘energy trilemma’.

Unplanned shut downs could mean that there is just 4.1% spare electricity capacity available during a cold spell – but that is just the tip of the iceberg, it says.

The National Grid has said the gap between total electricity generating capacity and peak demand was at its narrowest since 2007.

It has been suggested that extreme weather this winter or an external pressure, such as Russia cutting off gas supplies to Ukraine, could see the margin tightening, resulting in the grid failing to meet its ‘basic reserve requirement’.

If that becomes the case, contingency measures would be adopted, such as paying factories to shut down for periods of peak demand and supplying additional reserves from moth-balled power stations.

Paul McCullagh said: “As our research shows, there is no doubt the ‘energy trilemma’ will become one of the major issues facing the Government and businesses over the next decade.

“The latest outlook report about fears over the lights staying on highlights the growing concern over energy security.”

He stressed that today’s alert was the start of a new era in terms of security of supply.

The UrbanWind CEO warned of a possible decade of blackout threats and brownouts unless urgent action was taken. He pointed out that new generating capacity would take at least five years for open-cycle gas turbine power plants and in excess of 10 years for new nuclear sites.

“Again, we see that the need for investment in energy projects to keep the lights on is also proving to be something that politicians of all parties continue to struggle with,” he concluded.

This was posted in Bdaily's Members' News section by Mark Smith .