Energy management tools important as the nights get longer...

Winter is coming. As energy demand rises, flexible energy management could provide businesses with a tool for balancing their budgets, says Jeff Whittingham, managing director of DONG Energy Sales UK.

The UK’s changing energy mix has made balancing supply and demand more complex than in the past. Businesses can no longer afford to play the part of passive consumers. Energy users have a new and vital role to play in making the UK’s energy system work. That role is perhaps best known as demand side response. Put simply, this means switching down when anticipated demand outstrips supply, shifting load away from peak periods, and generating power onsite at optimal times wherever possible. If businesses take on this responsibility, the benefits to us all in the long term will be significant and far reaching.

But what about the benefits for those businesses right now? What is the motivation for time-strapped company leaders and energy managers to sign up to one or more of the plethora of new flexibility schemes available to them? And how can we as an industry remove the obstacles which might prevent the decision makers from getting involved and seeing their business reap the more immediate rewards this coming winter, as well as in the longer term?

The benefits in store for businesses who choose to embrace flexibility go well beyond short-term financial gains. They can also deliver results in terms of CSR goals and stabilisation of longer term, industry-wide energy prices. Nonetheless, seeing immediate impact on this winter’s energy bill and creating a new revenue stream for your business at a time of squeezed budgets are two great reasons to move to a flexible energy strategy now rather than later.

Flexibility has the potential to deliver significant savings to businesses of all sizes. Thinking about the times at which your business uses energy – avoiding peak periods during the day and making use of Triad warning schemes for instance – will make a real difference to your bottom line. For those who have already exhausted all of the ‘quick win’ options for energy efficiency, a well thought out demand management strategy is the natural next step. Thanks to recent innovation across the energy industry, the options for getting your business there are ever-increasing; whether you’re interested in easy-to-implement “starter” options such as Market Price Optimisation, or are ready to take the plunge with more tech-reliant schemes that might require a higher level of commitment.

Add a new revenue stream to the savings you will already be making and the reasons for taking part really start to stack up. Most flexibility schemes, like DONG Energy’s own Renewable Balancing Reserve (RBR), offer a financial incentive for participation - such as a share of the imbalance cost savings made thanks to your business’s flexibility.

What exactly are the business barriers to flexibility? We thought this was a question best asked of the businesses themselves, which is why we decided to host a learning workshop exploring the energy management issues facing businesses. We were keen to discover why participation in flexibility schemes across the board wasn’t as high as it could be. After all, the secure energy future of all UK consumers depends significantly on us being able to better nurture our sustainable options.

The answers we were given are fully explored in our new Flexibility Report1. However, the most common theme to emerge throughout the workshop was an incomplete understanding of the options available to businesses and the value they could bring. While the amount of information available has grown almost as quickly as the range of Demand Side Response (DSR) products in the marketplace, that information can be difficult to interpret and apply to a business with its own specific range of challenges, run schedules and equipment.

The overarching business needs which we were able to identify as crucial to driving participation can be summarised as follows:

• more clarity over the range of flexibility products and services available;

• risk-free flexibility schemes with low or no penalties for non-delivery and a guaranteed revenue for reserve;

• the opportunity to participate year-round, not just during winter peaks;

• flexibility schemes that are easier to take part in, contractually and operationally

• integrated energy solutions for both electricity supply and flexibility; and

• guidance on how flexibility could contribute to carbon reduction.

Integral to all of these requirements, the overall message rings clear: businesses need tailored products from industry partners who fully understand their operational requirements and limitations. They also need a robust and quantifiable case for flexibility if they are to prioritise it over other energy-related projects.

If we accept that flexibility is the key to helping businesses weather the storm this winter, as well to ensuring a better energy future for us all, then it is imperative that we take action. We must look for ways to break down the jargon, simplify the options and support businesses in selecting the most appropriate flexibility solutions for them.

Reference 1. Available for download at http://www.dongenergy.co.uk/energyforbusiness.

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