There’s life after Triads

The end of the Triads is a blow to major energy consumers such as universities, but, according to Barry Hurst, there are other opportunities to generate revenue from flexibility services

Barry Hurst

Head of sales for Enel X UK & I

www.enelx.com

he deepening energy crisis

Tand ongoing economic challenges are increasing costs across the board. The considerable pressure they add to the further and higher education (FHE) sector will continue into 2023. The end of Triad calculations for the UK’s Transmission Network Use of System (TNUoS) charge in February 2023 may seem like yet another blow, but there are other opportunities available for universities and colleges to generate revenue from demand flexibility services.

Triad avoidance presented an opportunity for universities and colleges to reduce their annual energy bill by 25-30 per cent or more. Given that annual energy costs for the FHE sector are around £200m, it was an opportunity worth pursuing. The challenge was to predict the three busiest half-hour periods of the winter that the TNUoS charge is based on and reduce demand during those periods. It could take 20 or 30 attempts to correctly anticipate which three peaks – the Triad periods – would be retrospectively selected, potentially reducing consumption each time with no guarantee of success. If you were successful, you received a financial benefit. Universities with large student accommodation blocks who were able to adjust consumption could make massive savings. Adjusting water temperature and HVAC settings for a 1,000-room facility could achieve a saving of around £18,000 for each of the half-hour periods.

Ongoing opportunities

It is not all doom and gloom however as there are ongoing opportunities to help address the energy crisis and deliver a more stable revenue. These include both National Grid’s recently launched Demand Flexibility Service

Participants can receive revenue for reducing their demand on the electricity grid

(DFS) trial and the more established Capacity Market (CM).

DFS is a short-term mechanism established to support the grid over the winter months from 03rd November 2022 to 31st March 2023. Its offer of a guaranteed revenue stream for participants promises to ease some of the economic pressures on the FHE sector. While it offers more stability and predictability to businesses than the Triads, DFS is only a short-term measure. What it does do is provide a taste of what it would be like to participate in an established and longer-term solution – the Capacity Market.

Anticipated peaks

Instead of previously trying to predict when to avoid three retrospective peak periods between November and the end of February, under the new DFS universities and colleges are invited to participate in at least 12 anticipated peaks between 01st November 2022 and 31st March 2023 for a minimum of 30 minutes. On all of these occasions, participants can receive revenue for reducing their demand on the electricity grid or increasing their onsite generation.

This presents a real great opportunity for any FHE facility with the ability to reduce load or ramp up onsite generation by more than 1MW across their portfolio.

Universities and colleges are invited to participate in at least 12 anticipated peaks up to March 2023

DFS is predictable, so will help with business planning and investment decisions and could earn a business £3,000/MWh with a Guaranteed Acceptance Price (GAP) for DFS tests.

There are no up-front costs for getting involved. Demand customers are monitored via their existing half hourly meter, so there is no need to change any installed equipment. In essence, it’s a turnkey ‘plug in and play’ solution that guarantees a revenue stream until 31st March 2023. It’s not a bad earner for the short term, but the real prize lies in the Capacity Market (CM).

Candidate for Capacity Market

If your university or higher educational establishment meets the criteria to participate in DFS, you are also likely to be a candidate for the CM. Any campus with the ability to turn down or switch on a MW or more of capacity across their sites can earn revenue from the CM.

The CM is a well-established, longterm mechanism. On the demand side, the CM incentivises electricity users to free up grid capacity when it is needed most, for instance by modulating their own generation assets – such as CHPs, switching to back-up generation and storage, or by curtailing equipment to reduce external load at peak periods. Simply balancing on-site air handling units, heaters or chillers for a few minutes at a time – while keeping them within their performance boundaries – could generate valuable extra revenue without students or staff being impacted at all.

Like DFS, participants are paid to flex their electricity usage at periods of grid stress, but the CM offers contracts that span years rather than months. A participating university or college could realise an approximate additional £16,000-£17,000 per MW per year over four years (from 1st October 2023) via the CM. Money that could be invested in future sustainability projects.

The application deadline for the CM is 31st March 2023, for involvement from 1st October 2023. Participation in the DFS scheme opened on 01st November 2022, but there is still time to apply, participate and generate revenue before March 2023.

If you’re new to operational flexibility, the best way to approach the DFS or CM is to partner up with a flexibility expert who can handle all of the market and program complexities. ■