Increased awareness and participation is putting energy customers in the driving seat, according to DSR pioneer.
The growing power of energy consumers in shaping the UK energy market and keeping power supplies secure is leading a seismic shift across the industry, according to the founder of leading demand side response (DSR) aggregator, Flexitricity.
Dr Alastair Martin, CSO of the Edinburgh-based firm, believes that the now mainstream participation of UK businesses in arenas such as the Capacity Market, together with the mounting popularity of electric vehicles and growing interest in domestic DSR, are symptomatic of a trend that is blurring the lines between the consumer and industry.
Dr Martin shared his views ahead of the formal launch of Flexitricity’s energy trading service, Flexitricity+, which will bring industrial and commercial energy users into the centre of the energy market, by opening the door to National Grid’s Balancing Mechanism for the very first time.
The Balancing Mechanism (BM) is the real-time flexible electricity market National Grid uses to balance supply and demand. BM prices can reach £2,500/MWh, compared to around £50/MW in wholesale markets. The market is used around 3,000 times per day at a cost of £350million per year – a cost which is passed on to bill-payers.
By taking the flexibility of industrial, commercial and public-sector energy users right into the BM, Flexitricity says it can give its customers a slice of this premium market, while cutting the cost for National Grid and all energy users.
Speaking of the move, Dr Martin said: “We’re already the experts in monetising flexibility in energy consumption and generation. We work with over 50 organisations across around 20 sectors, and we’re going to keep doing that, whoever they buy their electricity and gas from.
“But there’s a customer base out there who could do more if they had the opportunity. That’s what this is about. We’re cracking open the most important market in flexible energy for those who can both earn from it and contribute to it.
“This is about giving customers access to value that has been hidden behind a locked door until now. At Flexitricity, we do not have our own power stations to trade like the Big Six, so we don’t compete with our own customers. This means we can truly focus on generating revenue for customers as they work with us to keep the grid balanced.”
He added: “We already know from the rise of smaller, more disruptive firms, that big isn’t always best. Whether they are powering their home or their business, customers want value, integrity and attention to detail. They are more engaged in the marketplace than they have ever been before, and this involvement is growing.
“As the first mover in this space, we know that we are more able, more agile and better equipped than the bigger players to cope with the detail and complexity of this operation.”
Flexitricity currently works with a wide range of industrial and commercial customers, operating electricity balancing services from its 24-hour control room. Industry rules mean these are currently separate from the BM. By becoming an energy supplier, Flexitricity plans to join these activities together.
The new Flexitricity+ service will be targeted at businesses and public sector organisations. It will be particularly suited towards those that operate community energy schemes, combined heat and power (CHP) generators and cold stores, as well as developers of small merchant energy assets like battery storage sites.
Ron Ramage, Flexitricity’s CEO, said: “The new energy trading proposition is a natural evolution of Flexitricity’s business model, taking advantage of our technical capability to exploit a gap in the market which we believe offers real value to our customers. We will be working with three expert organisations to help create and deliver our energy supply offering: ENSEK, Quorum Development and Jules Energy. All three are widely-respected names in the industry with unbeatable track records.
“This is the first time anything like this has been done in the Balancing Mechanism and we think it will be transformational – we are unlocking value for our customers as well as for bill-payers across the country by making our electricity system more efficient.”
For more information, visit: https://www.flexitricity.com/en-gb/energy-supply/
Ends
Issued by Weber Shandwick on behalf of Flexitricity.
For more information please contact:
Dyan Owen: 07738 086 818 / dowen@webershandwick.com
Notes to Editors
About Flexitricity:
Flexitricity partners with businesses throughout the UK to provide reserve electricity to National Grid.
The word “Flexitricity” means “Flexible Electricity”. The company looks for flexibility in electricity consumption and generation, creating revenue for energy users and generators using the flexibility they find.
Based in Edinburgh, the company introduced the concept of aggregated load management and flexible generation.
Flexitricity has been aggregating electricity production and consumption of energy-intensive industrial, commercial, and public sector companies since 2004. Flexitricity offers these electricity volumes to the transmission and distribution system operators as positive or negative reserves for ancillary services. In Europe, Great Britain is the most developed market for demand response services. Flexitricity pioneered this market sector and continues to lead it in terms of volume and technical capability.
Flexitricity is part of the Alpiq Group, a leading Swiss electricity and energy service provider. In the area of demand response services and peak load management, Alpiq provides flexibility services to its customers. As a technology corporation, Alpiq develops new products and services in the area of digitalisation and is already successfully working in this growth market.
National Grid’s estimate of savings to consumers can be found at: http://www.nationalgridconnecting.com/how-dsr-could-transform-our-energy-system/