Background: the grid under pressure
With around 30 Gigawatts of older fossil fuel and nuclear generation due to be de-commissioned by 2025, the UK is marching towards an energy capacity ‘gap’. The ‘capacity margin’, the buffer between peak demand and supply, has tightened, and the National Grid is being forced to take measures to secure additional capacity.
Historically coal has accounted for a large proportion of current UK capacity and balancing services, but coal will be fully de-commissioned by 2025 which will make the problem of balancing demand and supply in the National Grid even more challenging.
The commercial energy storage opportunity
Cost effective energy storage has finally arrived, bringing businesses the opportunity to:
- Store electricity from renewable sources such as solar panels: if you have a solar system, store excess solar for later use – time shift rather than export it to the grid;
- Reduce peak electricity costs by reducing ‘time-of-use’ surcharges such as TRIAD charges (TNUoS) and DUoS;
- Earn income by providing support services such as frequency regulation, balancing services and capacity market payments to the National Grid;
- Install a reliable commercial UPS battery back-up (replacing environmentally unfriendly diesel generators);
- Avoid the need for costly grid upgrades e.g. to support EV charger roll-out;
- Reduce carbon footprint by reducing transmission losses (when used with on-site generation) and making the grid greener by eliminating the need for further investment in fossil fuel generation;
- Bespoke solutions to match current site demand with the possibility of adding further power modules for future demand giving long term energy security.
Attention high electricity users! Funded energy storage has arrived…
While many organisations are interested in adopting storage technologies, the revenue streams and long paybacks make it difficult to justify the upfront capital and meet payback thresholds.
Zestec specialise in energy storage solutions for businesses, giving increased levels of control over energy consumption and the ability to safeguard against volatile energy costs.
Working with our institution investor partners enables us to offer funded energy storage solutions to high electricity users, meeting these criteria:
- An import connection sized at 1000kVa plus;
- Minimum base load of 500kW and / or potential for export connection;
- Long-term (10-15 year) intention to utilise premises (and maintain current load), satisfactory credit history.
Effectively our investors retain ownership of the energy storage system (ESS) to earn grid income, whilst you benefit from significantly reduced connection charges which are continuing to rise and are set to exceed more than 50% of your electricity bill, plus you have the possibility of including a commercial UPS battery back–up solution to protect your critical loads.
How our solution works
Our team will analyse your energy consumption, design, install, finance and operate the energy storage system, enabling your business to benefit from immediate bill savings with no capital investment required.
And as you would expect from Zestec, we will also perform all necessary maintenance as well as 24/7 remote monitoring to ensure everything is operating efficiently.
Time-shifting, DUOS, TRIAD and other charges
The Capacity Market and Frequency Regulation markets are already attracting ‘pure-play’ battery farm investments where there is no on-site load. For high energy users with an on-site load, energy storage systems also present a ‘cost avoidance’ opportunity, known as ‘Time-Shifting’. In order to understand this, it is helpful to understand the DNO billing structure underlying the billing of half-hourly metered properties.
Half-hourly metered properties incur a number of charges originating from the DNO that are related to consumption during certain time windows, primarily the peak demand window of 4pm-7pm weekdays, either in winter or all year round.
Specifically, these charges are as follows:
- DuOS Charges:DNOs charge distributors more for electricity consumed in the Red Band
- TRIAD Charges: Customers are charged TNUoS charges to cover the cost of installing, operating and maintaining the national transmission system. Customers are charged based on their energy consumption during the TRIAD periods. These are the three settlement periods (half-hours) of highest transmission system demand in each winter season (November to February), with a minimum 10 day separation. Charges are based on the average of the half-hourly KW demand being recorded at the time of the three national peaks
- Climate Change Levy (CCL) charges: This Government-imposed tax designed to encourage reduction in gas emissions and greater efficiency of energy used for business or non-domestic purposes. Clients are now being charged a substantial amount within their bill to cover for CCL plus:
- Renewable obligation payment (Government support mechanism for large-scale renewable electricity projects in the UK)
- Feed-in Tariff payment (Government support mechanism for small-scale renewable electricity projects in the UK)
- Distribution Losses payment (the difference between the electricity entering the distribution network and that leaving it)
- Transmission Losses payment (the loss of power or voltage of a transmitted wave or current in passing along a transmissions line or path or through a circuit device)