16 Jun The Generation Game: Good Game! Good Game!
How customers are playing to win in today’s generation game
Traditionally the domain of large wholesale players with centrally controlled generation units, generation is fast becoming a distributed game.
Currently, we are seeing a mix of three different types of generation customer, which I am sure you’ll recognise:
- Traditional Generators: Those who generate power because it is their core business, they may own a fleet of power plants, solar or wind arrays or just one or two.
- Prosumers (for risk). Those that generate electricity because it is a core resource and the energy cost, availability, reliability and efficiency is important to them and their business. And, for whatever reason, they cannot wholly rely on their grid company or supply company to meet their energy requirements.
- Prosumers (for sustainability). Prosumers who generate using their own renewable power in order to meet their sustainability targets.
But, what’s clear is that the lines of business are becoming increasingly blurred as new generation and battery technologies mature. We ask more and more, what’s stopping today’s generators from doing all three?
Why isn’t a power generation specialist striking deals with a local business or a number of businesses and becoming an on grid or even an off grid utility? Likewise, what’s preventing a large or even moderate consumer of power self-supply a higher proportion of their energy needs and acquire the embedded benefits?
With these changes, alongside more intermittent energy we see a whole host of new opportunities to create value.
Create value without being a wholesale participant
In the UK, there is the potential to contract directly with National Grid or via an aggregator (a sort of Third Party Intermediary) and provide reactive power, frequency response services, reserve services or demand side response services. All of these opportunities allow you to create value and you don’t have to be a wholesale participant to do this.
Sell back power at a profit
Alternatively, you could work with your energy retailer to provide on-the-day services where you can sell back power to the market at a profit. Quite recently prices spiked to £1,200 per MWh equivalent and there are going to be more of these opportunities where the energy supplier might provide the signals for an end generator to respond.
Avoid key costs by switching off at peak times
You can consider quite simply going off-grid, or partially off-grid, to avoid transmission network costs or local network costs at specific times of day. We recently reviewed one case where a customer had the potential to avoid a cost of circa £250 MWh by just switching off some of their industry processes at a specific time of day.
If the business case for batteries makes sense on your grid location, there is the potential to store power. In addition to all of the benefits of avoiding peak network costs, generating on site and receiving embedded benefits, customers are working towards sustainability targets.
If you’re playing the generation game, are you playing with the right tools for a Good Game, Good Game? Traditional trading systems, in addition to being too costly, fall short of providing a number of the key aspects this new energy world demands. As the spreadsheets become too cumbersome, you may be searching for more dynamic way of working if you want to capture the benefits now available to you. What are the scores on the doors?
If you want to play the #generationgame and move to a #smarterenergyfuture get in touch to find out more about the Utilidex Hub. And make sure you sign up for our exciting summer event to learn how customers like you, are winning the game