Demand reduction
Introduction
A supermarket is looking to provide Flexible Services to Electricity North West through an Operational Utilisation & Variable Availability contract by reducing their energy usage at peak times.
About Flexible Services
When the demand for electricity is greater than the amount that Electricity North West can provide, we procure Flexible Services to alleviate constraints on our network during peak times. These services are provided by companies or individual customers known as Flexibility Providers, who own assets in our region such as generators, battery storage and Electric Vehicle (EV) charge points that can generate more or use less electricity when required, and can provide a minimum of 10kW either individually or via an aggregator. This allows us to balance supply and demand, ensuring a safe and reliable supply of energy for our customers and in return for providing extra capacity, flexibility providers receive payment from the network.
Delivering an Operational Utilisation and Variable Availability service through demand reduction
The Operational Utilisation & Variable Availability service is a pre-scheduled product that is procured to manage peak demand loading on the network. There are a number of ways the supermarket can reduce their energy consumption to deliver the Secure service during the required window. These include temporarily switching off:
Store heating and cooling systems: Account for between 30% and 50% of a supermarkets total electricity consumption. Freezers may be able to be pre-cooled in advance of a service delivery window and then switched off for the duration of the service window to reduce electrical demand. These can be linked to temperature sensors which will cause the cooling to resume if the temperature within the fridge/freezer drops below a safe temperature.
Electrical ovens: By scheduling in store baking to times other than during the service delivery window this will allow the store to switch off the Electric ovens utilised within the bakery reducing the stores electrical demands during these periods.
EV charge points: Controlling the number of electric vehicles on charge or the rate of charging to reduce electrical demand. This could be either via an automated smart chagrining technology or by manual scheduling. This is likely to be more controllable for fleet vehicles of the supermarket (e.g. delivery vans) and staff EV charging. For example if all the delivery vans are left at the store overnight they can be charged up when there is no flexible services requirements and then they are not adding to the stores electrical demands during the delivery period.
Heating and cooling systems: Store heating and cooling systems can be temporarily reduced in output/switched off during the service delivery window to reduce the sites electrical demand. Heat and cold storage technologies could be utilised to maintain the stores temperature whilst not increasing the stores electrical demands. Alternatively hybrid heating systems such as a combined Electrical and gas heat pump system could be used to swap from electrical demand to gas demand.
Pre-tender
Our tenders are published on the ElectronConnect and Piclo Max platforms twice a year in Spring and Autumn in line with our Network Development Plan (NDP) and Distribution Future Electricity Scenarios (DFES) publications to reflect our latest requirements. To be notified of our upcoming tenders, the supermarket signs up to our flexibility mailing list.
Prior to the launch of the tender, the supermarket:
- Registers the company onto either ElectronConnect or Piclo Max (whichever platform they prefer) to pre-qualify to participate. The information submitted such as credit checks and insurance details are assessed by Electricity North West and once approved, the company's commercial qualification remains valid for future tender rounds.
- The supermarket then registers and pre-qualifies the assets they wish to put forward in the competition.
- Electricity North West utilises the Standard Flexibility Services Agreement developed by the Energy Network's Association Open Network's Project.
Tender process
Pre- Qualification
Once the ITT has been published, the supermarket reviews the requirements using the interactive map on the platform and upon establishing that their warehouse is located within a requirement zone seeking an Operational Utilisation & Variable Availability service, they calculate how much of the required demand response it can offer, when, and at what price. Prior to submitting a bid, the supermarket uses the cost calculator tool on our website to check that the prices they are prepared to offer for availability and utilisation don't exceed the ceiling price that we are offering for the service as part of this tender round. The cost calculator can be found within the ITT appendices. At this point, the supermarket has decided they would like to participate in the tender and their next step is to complete technical qualification on their chosen platform by confirming the assets they wish to put forward in the competition. Electricity North West then assess the technical details of the participating assets and the capability for delivery. The supermarket is notified via ElectronConnect that their assets meet the requirements of this tender, allowing them to move to the bidding stage of the process.
Submitting a bid
For the final stage of the procurement process, the supermarket submits a bid to the tender via their chosen platform. This is carried out by linking the pre-registered assets to the Availability and Utilisation payments, as well as the periods where the supermarket can deliver availability of the response. Once the bidding window has closed, Electricity North West assesses the tender responses before accepting or rejecting bids based on the proposed payment and its ability to meet the specification. If the supermarkets's bids are successful they will then enter into a Flexibile Services Agreement with Electricity North West to deliver the service within the required service windows.
Helpful tips to consider pior to submitting a bid:
- Prices should be made up of an Availability payment and a Utilisation payment. Availability is the price paid to the provider even if Electricity North West don’t call on the flexible service and Utilisation is the price paid to the provider for the level of response they have actually provided on request. Note: Electricity North West will not always utilise as much energy as they have requested availability for, there is a level of over procurement built in to ensure that there will be a sufficient response available if required.
- When calculating the tender bid prices the provider should consider the cost of lost revenues, fuel costs, environmental or permit fees, initial set up costs, maintenance, other revenue streams available, energy savings benefits etc.
- When thinking about the Availability periods the provider should consider the practicalities of these Availability periods, the processes required to ensure that the service can be delivered, seasonal considerations e.g. increased footfall during the Christmas period, weather related issues e.g. extreme cold weather requiring the heating demand to be increased higher than normal and maintenance periods.
Flexible Service products
Electricity North West procure three common products (services): Peak Reduction, Operational Utilisation and Operational Utilisation and Variable Availability which align with the Open Networks service definitions.
The Operational Utilisation and Variable Availability product is used to keep the power flowing during an unplanned network event, often during summer maintenance work. The farmer will contract in advance for a post-fault response with Electricity North West, i.e. They know in advance the windows which they need to be available to deliver and an estimation of the level of response which will be required. Since there is no certainty of Utilisation with post-fault services, Availability fees are paid to the farmer to remain in a state of readiness to respond immediately to a Utilisation instruction during the service window(s).
Delivering the Operational Utilisation & Variable Availability service
As the service is required following a network fault or unplanned network event, it consists of an Availability and Utilisation fee. By accepting an Availability fee, the supermarket is expected to be ready to respond to Utilisation calls within 15 minutes. The availability windows are declared a week-ahead each Thursday for the following week (commencing Monday). Availability payments are credited when the service is scheduled and a Utilisation payment is awarded on delivery. The supermarket can choose to receive dispatch instruction via Application Programming Interface (API), email, or Electricity North West owned Remote Terminal Units (RTU).
Subject to the delivery of Flexible Services, the supermarket will invoice Electricity North West and will receive payment by bulk electronic clearing (BACS) by the end of the following month (after such invoice is received). More details on payment can be found within the terms & conditions of each Invitation to Tender.
Useful links
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Get in touch
Please get in touch if you have any questions relating to flexible services, would like to leave feedback or book a meeting with a member of our team.
One-to-one discussions
We host one-to-one discussions every Wednesday afternoon to guide stakeholders through the process of providing flexibility to the network.