Mission critical sites & DSR report

Mission critical sites and DSR: turned on or turned off?

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Mission critical sites and DSR: turned on or turned off?

Executive summary Demand-side response is becoming more critical as a method to balance the grid with increasing amounts of intermittent generation and a reluctance to have fossil fuel spinning reserve in place. Sites with back-up generation are ideally suited to this and therefore critical facilities, such as hospital data centres, utilities and the like, should be making money and helping to balance the electricity system. However, being critical, they are more interested in maintaining 100% uptime.

Can you make DSR a reality for critical sites without compromising resilience? Is participation too much risk for too little gain? There is the argument that assets for back-up power have to be tested, can this be scheduled to make money at the same time?

This white paper from Mission Critical Power will discuss the revenues available for assets entered into demand response schemes, the type of schemes available, the barriers to entry along with a host of market views about the challenges and opportunities, changes in legislation and the technology requirements.

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Mission critical sites and DSR: turned on or turned off?

Mission critical sites and DSR: turned on or turned off?

Switching on to Demand-side Response Last year, our Demand Side Response: Shifting the Balance of Power 2017 Report surveyed a wide range of industry sectors and found that the majority (78%) of those that participate in demand-side response (DSR) are satisfied. Furthermore, most of those that do not provide DSR would be interested in doing so if it did not affect core business (77%). For mission critical sites, however, the latter is the crux of the matter: can it be performed safely without risk to their core business?

When your core business requires 100% uptime, participation in processes that involve your power assets is something that requires special consideration and due diligence. Understandably, engaging with DSR means overcoming an element of fear. This white paper explores the potential of DSR in mission critical sectors, the challenges and opportunities, changes in legislation and the technology requirements.

By talking to mission critical sites, as well as suppliers of DSR services and technologies, we know that there is growing interest in DSR – hospitals, data centres, banks, utilities and transport networks are now participating, although not all of these sectors are happy to openly discuss their projects.

The data centre industry, in particular, has been unwilling to share information with others, but there is clearly movement in this sector. A number of aggregators have told us that they are working with data centre facilities, which have historically shown reticence in adopting DSR. Stuart Duncan, a DSR expert from Ørsted (formerly known as Dong Energy), comments: “By the very nature of a mission critical site they all have the potential to supply flexibility in some shape or form.

Many industries have been on a journey over the last few years, educating themselves on the opportunity and rationalising this against their traditionally risk averse attitudes.

“As adoption has increased in certain areas, the learnings are becoming more transparent in the market and providing some comfort. A good example is the data centre industry, where we’ve seen operators invest in additional generation to optimise returns 4

and take advantage of headroom with their DNO connection.”

Nevertheless, the proliferation of Non-Disclosure Agreements (NDAs) in this market makes it difficult to obtain details on specific reference sites, which could serve as models for others operating within in the data centre industry. Webaxys, a colocation provider based in France, has bucked the trend and shared its experience, which is discussed in this report.

The DSR market is complex and some commentators observe that there is a case for simplifying the schemes currently available. The proliferation of different revenue streams can be daunting for critical site operators negotiating their way through the DSR landscape.

“End users often don’t realise they need the right partner company to help them access the most lucrative schemes, and to transition seamlessly to new schemes as they come on line,” says Michael Phelan, CEO of GridBeyond (formerly known as Endeco Technologies).

Gareth Spinner, from Noveus, a utility infrastructure specialist, also points out that “there are many imponderables at the moment”, which means that “individual mission critical sites should not approach DSR in isolation”.

While the Medium Combustion Plant Directive (MCPD) has dealt a blow to the DSR market in the short-term, technologies such as UPS and batteries are likely to take over as the vehicles for engaging with DSR. According to Ofgem, rapidly falling technology costs are making this approach to the DSR market much more accessible (e.g. average lithium ion battery prices have fallen by over 50% since 2012).

Why engage with DSR? As energy-related failures can cost businesses as much as 17% of their annual revenue, the case for energy storage solutions to offer flexibility, reliability, security of supply and resilience, to organisations and the grid alike, is transparent and growing.

“DSR is an important tool in helping secure a stable

Mission critical sites and DSR: turned on or turned off?

electricity system both now and for the future. It can assist in lowering energy bills, reducing carbon emissions and help to maximise the use of renewable generation, filling troughs and softening peaks in demand,” says Dr Alex Mardapittas, CEO of energy storage and voltage optimisation experts, Powerstar.

“The transition to a low carbon energy future cannot rely on siloed thinking. It needs to be about bringing everything together – from grids to end users (such as businesses) and generators themselves.

“New technological advances will positively disrupt the way businesses interact with their energy and the way grid operators manage their systems by making them smarter,” adds Marc Borrett, CEO at energy tech company, Reactive Technologies.

Experts argue that DSR will enable renewable generators to operate much nearer to their full capacity and contribute to a greener future. Critical sites that come on board can also maximise the earning potential of their electrical assets and better manage their energy bills. As part of the research for

this report, we spoke to a cross-section of critical sites to gain a snap-shot of current attitudes and barriers.

Some of the observations given included the need to “increase financial incentives”, “offer long-term confirmation of benefits” and “provide assurances around risk mitigation”, to encourage greater participation in DSR. Other comments highlighted the need for: “reassurance that their assets will still have a long service life even when utilised more often” and “more clarity from the Government and the Department for Business, Energy and Industrial Strategy (BEIS)”.

Interestingly, one data centre site we spoke to – using hydroelectric power – had been primarily motivated to engage with DSR due to the ability to “improve data on back-up generators/UPS” and least motivated by “earning revenue from its assets”. Experts in DSR believe that attitudes to DSR are starting to change and more critical sites are showing an interest in coming on board. This white paper aims to shed light on this market and offer an insight for critical sites that may be considering the opportunities.

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Mission critical sites and DSR: turned on or turned off?

Barriers and opportunities for critical sites Demand-side response (DSR) projects are now under way at mission critical sites within healthcare, data centres, the water industry and banking, to name just a few. While mission critical sites are increasingly coming on board, there is huge untapped potential across a wide variety of sectors. It is clear that some sectors are more ready to adopt DSR than others. For those who have come on board, the revenues can be significant. However, some experts also claim that resilience may even be improved by taking part in DSR schemes. So why are some critical sites still holding back?

There is a perception within some mission critical sectors, particularly the data centre sector, that participating in DSR adds an undesirable layer of risk.

Data centres have been slow to come on board with DSR, in the past. Some say they are uncomfortable with what they perceive as giving ‘control to a third-party’; other objections include concerns that resilience may be affected – will their back-up power kick-in when it is needed, if their assets are called upon by the grid?

Others say the commercial reasons for participating are not sufficiently attractive to interest them at this time.

Equinix, a data centre and colocation provider, has ruled out DSR, while KAO Data says that it is currently looking at the “opportunities and risks that this type of initiative attracts”. KAO Data, which recently opened a new data centre in Harlow, is in the early stages of evaluating the feasibility of Frequency Containment response with UPS utilisation. However, Gerard Thibault, KAO Data’s CTO says that, to be safe, the company will want to examine ‘increasing battery autonomy’. This will mean looking at lithium ion batteries to “avoid destroying lead acid ones with the frequency of discharge.”

While the operator has not yet made a decision to participate, it is currently weighing up potential options as part of its wider commitment to sustainable energy use.

Russell Poole, Managing Director for Equinix, in the UK, asserts that there isn’t a convincing business case for his organisation to engage with DSR at this stage: “We understand the reasons for DSR and there’s no doubt it’s relevant to certain organisations. But from 6

our perspective, we have investigated it a number of times and are yet to find a compelling commercial and operational argument for it that is consistent with our obligations to our customers. Yes, you can generate revenue from DSR through feeding the grid – but that means diverting power from back-up generators away from their primary purpose: to support customers and ensure constant uptime,” he comments.

Gareth Spinner, from Noveus, a utility infrastructure specialist, points out that most data centre operators are very large power users which is critical to their day-to-day operations and hence they place power resilience and availability very high on their agenda.

“This generally means a grid connection with duplicate circuits for an N+1 resilience and then UPS and on-site generation supports the business in the very rare event of a total grid loss. For large users of power, such as data centres, participating in DSR usually means reducing the power taken from the grid and running back-up generators instead.

“However, this goes against the grain in terms of secure supplies. If you agree to run your back-up generators an hour per day at peak times, for example, you may find yourself in a position where you don’t have back-up power. Data centres often have concerns about fully participating, unless they have another way of managing their power…a lot of thought needs to go into this for mission critical sites. There is money to be made, but sites may ask themselves: is it their core business and, therefore, is it the right thing to do?

As you are potentially exposing yourself to a loss of supply from the generators, you need to perform a lot more due diligence. Of course, maintaining generators in good health is a business as usual activity and there is a case that running them more often is actually a good thing.”

He reveals that Noveus has undertaken some exploratory work around DSR with data centre clients: “In each case they have considered a number of options and have concluded it isn’t the right thing to do at this moment in time, but they all recognise that the landscape is going to change, and the opportunities need to be kept under review. It isn’t because there isn’t enough money in it; it is more that

Mission critical sites and DSR: turned on or turned off?

they feel that tenants are wanting secure supplies, and this should not be compromised. If the Network landscape changes then it would be a different issue.

If you are a data centre operator with multiple sites, however, you may be better able to manage where data is hosted, without reducing N+1 resilience.”

concerns over whether a site’s back-up power will ‘kickin’, in the event of an outage.

Dr Philipp Grunewald, an expert on DSR from Oxford University, agrees that perceived risk and availability are some of the key concerns holding back adoption of DSR among critical sites.

Stuart Duncan, a DSR expert from Ørsted, says it is important that businesses are clear on the options available to them in order to implement a DSR strategy that mitigates against their specific challenges. In addition, because business flexibility is so critical to the smooth operation of the electricity system, most schemes have strict obligations on delivery, so it is important to choose the right one.

“Loss of control can be a concern – even when it isn’t warranted. An example is the very low approval rating for fridges to be shifted in their chilling cycle to alleviate grid stress. Even though the temperature would remain within the same tolerances, less than 30% of the UK population would be happy with this kind of intervention. The same may be true for riskaverse, large users. Trust will play an important role here and education may help,” he comments.

“For me, the MW that carries the most value for any participant is the one that can be used flexibly across the value stack to capture opportunities as the market develops. Businesses need to understand the range of DSR services they can access and then prioritise how they deliver across these services based on their own appetite to risk. For mission critical sites, the clear challenge is doing this in a way that avoids downtime at all costs,” says Duncan.

Security risk?

With this in mind, Ørsted developed its renewable balancing reserve (RBR) scheme. RBR helps businesses unlock the value from the imbalance market. It works by reducing imbalance costs for Ørsted, as well as providing a revenue opportunity from the System Imbalance Price. The resulting savings are then shared with participating customers.

Convincing finance departments and engineering departments to look at DSR is one challenge. But data and IT departments are also significant elements of the equation, says Yodaly Sierra-Rubio, an energy strategist who has occupied positions of Associate Professor in Energy Economics at City, University of London and Energy Finance and Business Development Manager at CBRE. Sierra-Rubio says while DSR revenue streams are attractive, ultimately “it will not be about the revenue, it will be about the security and the data ... and the moment that you have to engage with their assets and go outside of the building, it becomes more difficult”.

Sierra-Rubio says aggregators and suppliers must have answers to security and data questions before they arise. She says moves by the Crown Commercial Service, whose framework agreement specifies that DSR providers must have strong cyber security credentials, are positive steps.

“But not all of the stakeholders will be aware of those parameters and will be very sceptical about it,” she says. “[Aggregators] need to market those credentials more powerfully.”

Mitigating risk, maintaining control and maximising revenue A number companies supplying DSR expertise argue that there is little risk to the business if the site power is managed correctly. Technology is available to address

“The main benefit is the flexible nature of participation,” Duncan explains. “RBR does not carry any of the perceived risk associated with traditional grid procured DSR services. There are no penalties or revenue claw back for non-delivery, no contractually obligated response times or lengthy call durations. RBR allows sites to participate on their own terms, at their discretion, importantly underpinned by a guaranteed strike price to provide revenue assurance for any activation.”

Roger Watterson, managing director at Deif (UK), also believes there is little risk if the site power is managed correctly. “The demands of DSR can be taken outside of the site’s needs so that only ‘excess’ power is used.

Therefore, if the power is needed by the critical power site, this will take priority over any DSR demands,” he explains.

So what considerations do mission critical sites need to make to ensure they participate without it affecting their business operations, while maximising their revenues? According to Watterson, this is addressed largely in the initial design stage where allowance is made in the control systems to be able to switch to 7

Mission critical sites and DSR: turned on or turned off?

DSR, as and when required, while also prioritising the site’s back-up power if needed.

“The local utility will make demands on how much power can be exported, so some local utility infrastructure may be required, but the local Distribution Network Operators (DNOs) are now much more friendly to accepting decentralised power. [A Distribution Network Operator is a company licensed to distribute electricity in the UK]. There are a number of ways of utilising the DSR demands and often these are part of an agreement with an aggregator who will detail the demands of DSR,” says Watterson.

“Ultimately, mission critical sites, such as data centres, are only as robust as the systems that they install to protect themselves,” comments Dennis O’Sullivan, data centre segment lead for Eaton.

“From their perspective, they are extremely paranoid about their infrastructure. They need to know that their site is secure – but it is important to understand that they only need a certain amount of stored energy to carry them over in case of failure. They have a huge reserve, but don’t have to commit everything they have in reserve – it can be a very small amount. If they have faith that their systems are robust, there shouldn’t be an issue.”

Monetising assets: revenues and DSR Enabling technology should not only mitigate risk, but also ensure sites benefit from the best revenue streams. GridBeyond’s EnergyConnect platform, for example, can switch facilities from one revenue scheme to another. Deployed at over 300 sites in the UK and Ireland, the platform connects the site’s assets direct to National Grid’s premium revenue schemes.

GridBeyond takes care of the necessary hardware and software installation, as well as the online monitoring and reaction systems, and the day-to-day running of the system. This is offered without any capex requirement. EnergyConnect goes beyond these revenue schemes, by stacking alongside smart tariffs, benchmarking and efficiency models.

GridBeyond’s CEO, Michael Phelan, explains that there are a variety of revenue schemes currently available, which offer different values for those participating in demand-side response. The following programmes are some of the main mechanisms open to DSR providers: Short term operating reserve (STOR) STOR helps Grid manage longer duration capacity shortfalls. It is largely provided by generation rather 8

than turndown DSR. Providers are given four hours’ notice and must be able to deliver for a minimum of two hours, three times a week if necessary. STOR payments have declined in recent years as more providers entered the market.

Capacity market The capacity market was created to ensure security of supply over the winter peak. It is open to all forms of generation and DSR. There is also a transitional arrangement (TA) auction, which has been reengineered so that it will only be open to turn down DSR providers. Capacity market contracts allow for provision of other balancing services, so long as providers deliver what they are contracted to deliver in the capacity market when called upon.

Demand turn-up (DTU) Demand turn-up is designed to help Grid cope with excess generation at times of low demand, i.e. summer.

DTU pays providers to increase demand or turn-down onsite generation. The notice period is longer than other forms of DSR and providers must be able to respond for at least two hours. It is currently a manual service but will likely become automated.

Frequency control by demand management (FCDM) FCDM is usually provided by large, intensive power users when a power station or interconnector goes down. An automated service, it interrupts electricity supplies within two seconds of grid frequency dropping below a certain threshold, and providers have to be able to sustain delivery for 30 minutes.

FCDM is a high value service.

Static frequency response Static frequency response is triggered when grid frequency drops below a certain threshold, usually if a power station drops out. It encompasses primary frequency response, which requires assets to respond in 10 seconds, and secondary frequency response, where assets must respond within 30 seconds.

They must be able to sustain output for up to 30 minutes. Interruptible processes and diesel generators on hot standby can be suitable assets. Static frequency response is a high value service.

Dynamic frequency response Dynamic frequency response keeps the grid stable in both directions – when frequency is too high or too low. As such, providers have to monitor grid frequency in real-time and flex consumption or generation up or down accordingly.

Mission critical sites and DSR: turned on or turned off?

Providers have to deliver within two seconds for up to 30 minutes, but in most cases, the duration of response is a few minutes. Dynamic frequency response is a high value service.

Enhanced frequency response (EFR) Enhanced frequency response is the fastest dynamic frequency response service. Providers have to deliver in under a second.

The first four-year contracts were issued in August this year, the vast majority to be delivered via battery assets. Providers have to sustain delivery for a minimum of 15 minutes in either direction. It is the highest value frequency response service.

Peak charge avoidance Avoiding peak charges on the transmission and

distribution networks also constitutes demand response. Reducing transmission costs is known as Triad avoidance.

Companies turn down consumption or switch to onsite generation over what they think will be the three highest winter demand periods. If they manage to accurately predict and avoid those peak periods, they can significantly reduce the transmission element of their bill.

Distribution peak charges, known as ‘red zones’, vary by distribution network but during weekdays largely fall in the late afternoon and evening, regardless of season. Companies that can reduce loads or switch to onsite generation during those periods can significantly reduce distribution network charges.

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Mission critical sites and DSR: turned on or turned off?

DSR: supporting green objectives without adding risk Instead of adding ‘risk’, could DSR reduce risk for critical infrastructure? Michael Phelan, CEO of GridBeyond says that mission critical sites are ideally positioned to help balance the grid and support the use of renewables. He argues that, in doing so, they will also improve their resilience.

Mission critical sites must take the lead in moving away from being passive ‘bill payers’ to having a major role to play in the bigger energy picture, according to GridBeyond’s Michael Phelan. He points out that, for early adopters, demand-side response (DSR), embedded generation and energy storage are already working well, but the pressure is on for those not yet participating to catch up.

“The whole grid is changing – there are a lot more renewables coming on to the grid. The electrical industry is going to have to come up with innovative ways to integrate renewables and solve the challenges that they pose,” comments Phelan. He explains that renewables tend to cause problems in the areas of frequency and inertia, and local voltage.

“This is vital for anyone that is involved with critical power. Tackling these problems with a mission critical site is the best approach, as it makes the site more resilient to these very problems. If mission critical sites sit back and do nothing and wait for non-critical sites to address these issues, the non-critical sites will end up becoming the most resilient sites,” comments Phelan.

“The systems people are using come in at specific frequencies, but they are not necessarily designed for the kind of frequency requirements that we are going to see in next ten years,” he warns. “In the past, organisations participating in DSR were only required to be there when the power went off, but the grid is asking for more now. It is calling out what it needs to make the grid more resilient – in particular in terms of frequency and inertia, and to a lesser extent capacity, voltage and black starts,” explains Phelan.

Mission critical sites should take the lead in this, in his view: “Critical sites invested in resilience when the grid was having problems, but they are going to have more problems – or opportunities (depending on how you view it) – with the increase in renewables.”

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When building new facilities, Phelan says that critical sites should be investing in leading-edge systems that are better able to deal with the issues they will face in the future.

“Data centres are increasingly saying that they want to use more renewables, but how can you do this and not keep up with what renewables require?” he comments. “DSR can help solve many of the problems associated with renewables, but it is hard to argue that you are green if you are not willing to participate with the very schemes that can help businesses become green,” he argues.

Going forward, critical sites will need to look at the types of battery and UPS systems that they are installing, to ensure they are more resilient, as well as ensuring they are available for DSR revenue streams.

One possibility will be to use lithium ion batteries, which are ideal for frequency response.

In the short-term, the new emission laws around the use of back-up generators are likely to have an impact on the DSR market, according to Phelan. Critical sites will need to verify whether their generation systems meet the new requirements and, if not, what modifications need to be made.

“The solution may be similar to what we are doing with diesel engines – i.e. using catalysts or performing more electronic abatement. There is a piece of work that needs to be undertaken, here, in terms of existing plant. In a modern economy, no one wants the whole system to be propped up by diesel. There is probably a case, especially for data centres, for retrofitting technology to meet the emissions requirements,” continues Phelan.

The Government’s latest position on emissions may shift the DSR focus towards battery and UPS technologies as the preferred mechanisms, in the

Mission critical sites and DSR: turned on or turned off?

immediate future. Fast acting technologies are what the grid wants, Phelan points out, and battery systems are ‘cleaner’. However, does participation in DSR ultimately impact on the battery life?

“Lead acid batteries aren’t suitable for DSR and have a limited number of cycles in their life. However, lithium ion is perfectly suitable,” says Phelan.

Mission critical sites, such as data centres, are typically on a four-year battery replacement cycle and will not see any degradation in performance during this time frame, as a result of DSR participation, he claims: “All these sites will have done, during this time-frame, is create a budget to replace the batteries by accessing an additional revenue stream,” he argues.

He advises that critical sites will need to have a good preventative maintenance system in place when using UPS for DSR and it will need to be more actively managed. However, this is a function that GridBeyond undertakes as part of its work with its clients in relation to DSR. He says that the monitoring of critical UPS systems is much improved as a result of this close management, and, if problems emerge, they are more likely to be detected earlier, compared to non-participating critical sites. This adds to the site’s resilience, according to Phelan.

Batteries: the holy grail for DSR? The battery market is currently being hit by changes in the capacity market, according to Phelan, so how can participating critical sites ensure they maximise their revenue streams?

“The market is favouring critical sites, such as data centres and hospitals, that ‘have to do things anyway’, but it is not favouring people who just want to invest in batteries – every move they make, someone is pulling the rug out from underneath them.

“There has been a lot of talk about battery technology but not as much investment. People were hoping that the capacity markets would clear fairly high.

Before Christmas there was a lot of interest, but the devaluing of the capacity markets has had an impact,” he explains. “We apply a hybrid approach using a combination of load and batteries to participate in frequency response and this is definitely investable; we use 20% battery and 80% load, so there is less exposure to market forces.”

GridBeyond has seen significant interest in DSR from

hospitals, but the approach in this sector has mainly focused on generators. DSR, using generators, is predicted to slow down in the short-term, in the wake of the new emissions laws. However, Phelan says that there is also a lot of interest from universities and the pharmaceutical sector, as well as growing interest among some data centres. Ireland’s water industry is now embracing DSR on a larger scale and the UK is starting to follow in their footsteps.

“Battery suppliers are also looking at whether they can engage with Dynamic Firm Frequency Response (DFFR). We believe it will build up gradually, but I am surprised that there aren’t more UPS manufacturers embracing and driving this forward. The grid is now paying for the resilience that they are providing,” says Phelan.

He believes that driving innovation is important, but it needs to go hand in hand with driving behavioural change. A large part of behavioural change is understanding, education and trust.

“National Grid’s Power Responsive programme has helped a great deal with untangling many of the ambiguities surrounding DSR, but we still have a way to go. There is a huge amount of complexity in the marketplace,” says Phelan. “GridBeyond doesn’t attempt to hide this from its clients, but looks to simplify this complexity into one programme containing multiple activities, all managed within a single technology platform, delivering savings and revenues.”

Ultimately, fully digitised DSR services will be imperative for finding flexibility for the predicted 4.9GW required for DSR, and the 0.3GW of storage by 2032. Implementing a cost-effective solution for balancing the variability of grid-scale clean energy with the demand of energy users is vital to taking full advantage of renewable energy and decarbonising the UK’s electricity system to hit ambitious green targets. A combination of technology, education and strong partnerships between aggregators, technology innovators, grid operators, suppliers and consumers will be key to developing a fully optimised smart grid.

About GridBeyond GridBeyond (formerly Endeco Technologies) is a provider of DSR products, energy optimisation technologies, and enhanced energy services. The company claims to have provided the first hybrid battery and load solution to National Grid and is developing machine-learning technology to deliver flexibility services that will help meet future needs for demand-side response and energy storage.

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Mission critical sites and DSR: turned on or turned off?

Critical sites: getting on board with DSR Data centres: battery storage and DSR A pilot project, in France, has been demonstrating the potential for a colocation data centre to use energy storage technologies and renewables to supply excess power to the Grid. Eaton’s energy storage technologies, developed in collaboration with car manufacturer Nissan, were implemented in Webaxys’ data centre in Saint-Romain de Colbosc near Le Havre, France.

The energy storage solution provides a ‘second-life’ for Nissan electric vehicle batteries, and in combination with Eaton’s uninterruptible power supply capabilities, provides an industrialised energy control and storage solution that enables integration with local renewable sources, as well as allowing companies to draw down from and provide energy back to the grid.

Webaxys, a host and telecoms operator, has pursued an innovation strategy based on strong values of social commitment and respect for the environment ever since it was established in Normandy, France back in 2003.

Using renewable energies such as solar power, which by its nature is intermittent, means that energy has to be stored. This has made the data centre an ideal candidate for participating in demand-side response.

“In addition to relying on electricity generated entirely using renewable sources and the optimisation of energy efficient technologies already used in our first data centre, we wanted to go further and commit to reducing our energy dependency using all the innovations at our disposal to minimise our environmental impact,” says Emmanuel Assié, CEO of Webaxys.

Webaxys’ customers were also keen to maintain their green credentials and being able to host their business in a sustainable way proved influential in their decision on where to place their business – in fact, rack space located in the part of the data centre piloting the approach was the first to be rented.

“Customers were able pass the message of sustainability back to their clients, improving their standing in the public eye…Businesses are now becoming more demanding in terms of green credentials, so you will see more take-up of solutions like this,” comments Dennis O’Sullivan, data centre segment lead for Eaton.

According to O’Sullivan, there is growing interest among data centres in participating in DSR: “In the past there was reluctance, as data centres viewed it as a risk; now they are seeing it as a potential money earner. It is a new, experimental approach and data centres tend to dip their toe in until they are entirely secure in the knowledge that it is safe, whereas other industry sectors may wade straight in.

“Data centres are waiting to see who else is doing it; we will see the increasing popularity of DSR, but the movement is slow. You could compare this to the use of free cooling. Originally, it was seen as a risk, now it is becoming the norm. I have witnessed this kind of evolution, throughout my career, and it will just be a matter of time before people accept DSR.” He reveals that Eaton are already seeing interest from colocation data centres and enterprise data centres.

Banking on overcoming risk aversion Kam Singh, director of energy, global workplace solutions, CBRE, says that risk aversion in the financial sector is the main challenge when seeking to 12

Mission critical sites and DSR: turned on or turned off?

London Underground is London’s biggest power consumer, with the largest private power network in the country. It has achieved significant savings and revenue of £3 million through demand side response, using its power station in Greenwich. The power station, which dates back to 1902, and was originally built to provide power for London’s Tram network, is used as a back-up for the Tube network.

Should normal supplies be interrupted, it would be called upon to help with the safe evacuation of passengers and staff, so it needs to be 100% available at all times. London Underground uses the Greenwich power station to reduce its reliance on National Grid’s power. Through DSR, it is able to offer a significant demand reduction of 55MW, and can quickly respond by switching to Greenwich’s five gas turbines for the length of time required. (Source: National Grid)

introduce frequency schemes. However, this can be overcome. CBRE completed what it describes as “the first frequency control demand management scheme in the banking sector” over four years ago. If you have a diesel rotary UPS that has a frequency switch on it, it is ‘money for old rope’,” says Singh. “You are doing it already. When the mains frequency drops to a certain set point, your diesel rotaries kick-in anyway. Purely demonstrating that availability, should be able to earn you a decent £30K-£40K per MW. “In this case, it was a 3MW installation. Despite the numbers stacking up and it seeming to be exceptionally straight-forward, it took around 15 months to get the project over the line,” Singh explains.

“The first challenge we encountered was going through four different aggregators. It was the fourth aggregator that stood up and said: ‘We can do this project.’ As operators of the site, we knew it made perfect sense.”

The site in question has a £5m per year energy bill and is a major broking house, typically trading trillions of pounds worth through its buildings. While the principle had been ‘sold’ to client, the aggregators did not necessarily understand the criticality of the asset, proposing to add a relay on the ‘other side of the bank’s infrastructure’, which of course was unacceptable to the bank. The fourth aggregator found a solution to overcome this issue.

“It now works like a dream,” says Singh, adding that the bank has seen significant rewards in terms of revenue.

“If we can do it with a client that is so risk adverse, in such a mission critical environment, it can be done in 90% of other locations,” comments Singh.

Going with the flow: water industry and DSR After labour, energy is Welsh Water’s highest cost, which provides a strong incentive to maximise the value of flexibility. The firm’s primary DSR activity is Triad and peak tariff avoidance. Andrew HeygateBrown, senior energy innovation analyst at Dwr Cymru Welsh Water highlights what is possible with some perseverance: “For Triad avoidance we reduced our demand by about 50% without the use of any diesel generators in parallel with the grid.”

In fact, the company has managed to reduce peak demand from 40MW to about 17-18MW net after export benefit – a significant saving. Welsh Water is now planning a major firm frequency response (FFR) rollout and is looking beyond frequency to broader markets. Heygate-Brown comments that dynamic FFR is more attractive to Welsh Water as it means that it does not have to commit upfront. This is an important consideration – Welsh Water only participates when the conditions are right, thereby safeguarding its environmental responsibilities.

“We want to declare our availability based on operational circumstance, at a given site, at a given time. Our principle activity is to provide safe, potable water for our customers, and also sewage services.

We aim to do this at the lowest cost possible, but, first and foremost, our priority is compliance. The ‘Habitats Directive’ dictates how we extract from rivers; if we extract too much the river levels will go down and expose fish eggs, which could lead to predation or they may dry up.

“It can also lead to fish becoming confused and migrating to their breeding grounds. We strive to ensure that our pumping activities do not harm the environment... If we draw too heavily from the reservoirs, it can lead to algal blooms. Waste entering the water can also kill the fish,” Heygate-Brown explains. “We are working with universities to ensure that when we do DSR, we don’t cause algal blooms or cause issues for the fish and the rivers,” he continues.

Heygate-Brown says he would prefer to participate directly with the National Grid. Dealing with middlemen reduces the benefit to Welsh Water and its customers, he points out: “The power has shifted to the aggregators. They can really charge what they like and the amount that we get paid is a lot less than it used to be,” he argues. “If we owned the technology ourselves, we could participate in the most suitable schemes, at the most suitable times, while meeting compliance and keeping customer bills down as much as possible.”

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Mission critical sites and DSR: turned on or turned off?

Severn Trent: beyond just revenue In October, last year, Severn Trent awarded aggregator Open Energi a contract to help balance the grid by using its flexible load in DSR programmes. Severn Trent signed an agreement to allow its process flexibility to be aggregated into a portfolio to provide services such as dynamic firm frequency response. The water company already used Open Energi’s platform to harness flexibility at two sewage treatment works, totalling around 1.2MW, and identified a further six sites that could be brought online. Longer-term, Severn Trent plans to bring smaller sites and estate buildings into balancing and the firm aims to bring forward more than 20MW of flexibility by 2020.

Rob Wild, DSR manager at Severn Trent, said the business case goes beyond revenue. “Open Energi’s tech delivers an income, but it also gives us far greater visibility of how our assets are performing, second-by-second. This insight can help us to optimise our sites for the future – pre-empting maintenance issues, improving resiliency, and thinking more smartly about how we integrate other technologies, such as renewable energy and battery storage,” he said.

Building resilience and revenue With many utility companies already seeing DSR work for them, it was an easy decision for Bournemouth Water to get involved. The utility company has a significant number of sites, most of them running energy-intensive assets such as water pumps, as well as back-up generation. With many water companies already seeing the benefits from using their energy in a smarter way, Bournemouth Water contacted DSR aggregators, KiWi Power, to see how the company’s assets could be best put to work. Bournemouth Water has successfully implemented the flexibility of demand side response while keeping full control of operating its systems within set internal parameters.

“Using installed meters, the aggregator remotely monitors and sends signals to our site controllers and Programmable Logic Controller units (PLCs) so we can make an automated decision to use the full range of our demand side assets. It can also send visual signals to our shift workers on site should they need to start local diesel generators or stop scheduled pumping,” comments Matthew Burton, an Energy Adviser at Bournemouth Water.

“This almost-instant flexibility allows us to take part in a wide range of programmes, namely Frequency Control by Demand Management (FCDM), Static Firm Frequency Response (FFR), Short Term Operating Reserve (STOR) and TRIAD avoidance (half hourly settlement periods).” Providing DSR does not interfere with the day-to-day running of the sites, according to Burton: “This is particularly important because of the critical nature of some of our equipment, particularly our water pumps. If a reservoir is full, for example, it wouldn’t be safe or practical for water pumps to be powered down or switched off.

“Working closely with our aggregator, we were able to build a vital layer of defence behind the DSR controls.

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Should a signal arrive during a critical time, the system automatically overrides it, putting the business and our customers first,” Burton comments.

The business has not only earned regular revenue, across the full portfolio of DSR products, but resilience of the site’s generators has also been improved.

“Regular testing under our DSR contract means we have total peace of mind that our generators will be fit for purpose during a power cut. Participating in DSR has proven a good decision. It has provided us with a mechanism to optimise our pump scheduling, put our standby generation assets to good use and earn extra revenue for our business,” Burton concludes. (Source: National Grid)

Energy storage and fast response The National Grid invites forward thinking companies which can provide energy storage solutions to join the Frequency Response Services (FRS); this includes Fast Frequency Response Dynamic (FFR-D), which helps maintain the stability of the grid. Noriker Power, which had been supplying conventional power to the UK electrical grid, recognised that joining the FRS required a different technology. Vertiv was approached to supply the advanced technology and technical speed of response needed. Dr Marc Thomas, of Noriker Power, comments: “The transition in the UK to using renewable energy is having a major impact on the National Grid and requires very fast acting and reliable techniques to assist frequency control. We needed to find a robust solution which could store and deliver energy in real time to meet the requirements of dynamic frequency response and control.”

For Noriker Power, facilitating this transition to renewable energy in a cost-effective manner was a difficult task, especially when natural resources for power generation are unpredictable or unavailable.

Mission critical sites and DSR: turned on or turned off?

DSR aggregator, GridBeyond (formerly Endeco Technologies), is currently working with a number of hospitals. Michael Phelan, CEO & Co-Founder of Grid Beyond, says that the revenues can be very attractive. In one example, a hospital is participating in high side dynamic firm frequency response (DFFR). This particular site has on-site CHP and a site load of 1MW. Their calculated revenues are predicted to average £52,000 per year (figures based on high side participation only).

Phelan comments: “DFFR would typically require a continual fast acting response, which is unappealing to most mission critical sites. However, due to Grid Beyond’s aggregated portfolio of flexible sites and assets, supported by the world’s first hybrid battery and demand network, these sites are still able to participate with less stress on their systems, yet continue to take advantage of the revenues associated with this lucrative scheme.”

After assessing a variety of options, Noriker Power deployed both valve regulated lead acid (VRLA) and lithium ion batteries connected to the Vertiv grid support inverters. These are used to store power on standby in readiness for additional energy to be injected into the grid to meet demand in milliseconds.

They are also able to correct grid power factor and harmonics. Generators were also incorporated into the design as the site’s power supply was ‘non-symmetrical’, as the grid connection available had different export and input kilowatt. Generators were also provided to take the strain from the batteries after a certain period, leading to a lower cost battery installation. The lithium ion and VRLA batteries are connected to a series of Liebert 80-eXL GS inverter systems. The systems are monitored by a remote diagnostics system that is manned 24/7/365 by Vertiv service experts. This provides real-time insights and information needed to maximise uptime of the systems.

Healthy returns for DSR? NHS Scotland had been in the process of engaging with DSR projects, although getting ‘over the line’ on these has proven a lengthy process, according to Kate Dapre, head of engineering, energy and sustainability at NHS National Services Scotland NHS Scotland comprises 22 boards and has an energy bill of about £100m per annum. The viable capacity for DSR is estimated to be more than 80MW, with the potential to generate significant revenue in the region of “seven-figures”.

The revenue opportunities are certainly attractive for hospital trusts; however, funding has presented a major hurdle, according to Dapre: “You are often told there is no cost of entry but there is a cost associated with updating equipment. The reality, for some sites, is that they require at least a six-figure sum to get the necessary network upgrades and switchgear, and it is quite a challenge to sell this to directors of finance.

Although you are generating revenue savings, you are not really saving carbon, which has a higher profile [on the NHS agenda], so it can be a difficult ‘sell’.”

Dapre comments that public sector inertia and bureaucracy makes it extremely difficult to push projects forward and it can take years to make any progress. While the savings are good, the process can be “exasperating”.

“I think when one or two sites implement DSR, then the others will follow suit. Nobody likes to be the first.

So, the more case studies we can have, the better. The positive is that while we are not doing much, we are starting to do something – and if those things pay off, more will follow,” says Dapré.

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Mission critical sites and DSR: turned on or turned off?

Emissions directive will hit DSR The Medium Combustion Plant Directive (MCPD) could have significant implications for businesses using on-site generators for DSR. Guidance issued by the Department for Environment Food & Rural Affairs (DEFRA) confirms that back-up generation can run for 50 hours without having to meet strict emissions standards. However, DEFRA defines a ‘back-up’ generator as “a generator operated for the sole purpose of maintaining power supply at a site during an on-site emergency.” This means that back-up generators cannot remain excluded from the regulations if they operate for other purposes, such as the provision of balancing services, even while conducting testing.

DEFRA had already clarified in October 2017 that generators that take on new balancing services or Capacity Market contracts from 31 October 2017 that remain in force after the end of 2018 would lose transitional arrangement status. That means generators that won contracts in the T-1 and T-4 auctions, in January and February 2018, must meet the new obligations by December 2018. Generators that do not enter into new contracts, running beyond 2018, will not need to meet the new requirements until 2025 or 2030, depending whether they are larger or smaller than 5MW (individually or collectively).

Clean up or drop out The MCPD covers various emissions but the challenging aspect, particularly for older generators, is the limit of 190mg/Nm3 for NOx (Nitrogen oxides). Even some gas plant will require abatement technology to meet that threshold. While there is a year for companies bidding into the Capacity Market or entering into new balancing services agreements to clean up their plant, for some the cost to do so may outweigh the potential revenues available.

For those generators left standing, the upshot may well be higher revenues from programmes such as short-term operating reserve (STOR), or its equivalent once National Grid completes its balancing services redesign.

The legislation will also likely force some aggregators and suppliers to look much more seriously at ‘load’ DSR (turning equipment on or off) as opposed to generation. While some aggregators may have to rethink their business models as a result of the legislation, the government says it is determined to improve air quality.

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Reaction: DSR damager?

Simon Mitchell, solutions development manager in Eon’s Business Flexibility team, is concerned that the government’s proposed rule changes may potentially undermine the broader DSR sector.

“We fully supported the new MCPD regime, which was a proportionate method of introducing new emissions regulations in a way which would allow sufficient time for businesses to take appropriate action and plan investment strategies, backed by transitional arrangements lasting out to 2025 or 2030 depending on capacity size or running regime,” he comments.

But changes to the legislation, inserted without consultation, have jaundiced the supplier’s view.

“The sudden shift in policy position has fundamentally altered the regime, and the clear risk is that policy undermines not just investor confidence but also the decentralised energy agenda, of which we know the government is supportive,” says Mitchell.

“We are already having discussions with a number of customers on this issue and there is every possibility that this sudden change in regulation will cause a number of generators to withdraw

Mission critical sites and DSR: turned on or turned off?

Emissions directive targets triad avoidance The UK interpretation of the Medium Combustion Plant Directive appears to rule out using back-up generators for Triad avoidance as well as demand-side response.

In January 2018, the government went beyond the MCPD requirements and passed The Environmental Permitting (England and Wales) (Amendment) Regulations 2018. However, the regulations contains crucial changes that were not included in the original consultation.

Back-up generators are excluded from the legislation – but only if they are used for emergency purposes for up to 50 hours a year. They cannot be used for any balancing services, nor testing regimes aligned to revenue opportunities.

Triad as balancing service?

The legislation describes a balancing service as any service procured for that purpose by National Grid. But it appears Triad – which is a billing methodology applied retrospectively and in no way a service procured by National Grid – will be treated in the same manner.

Mission Critical Power’s sister title, The Energyst, recently asked The Environment Agency if back-up generators could do Triad avoidance and remain out of scope of the MCPD. The answer was: “The Triad service is considered to be a balancing service. Any participation in a Triad event by a backup generator would make them a specified generator.”

Specified generators are subject to the regulations, and as such, have to meet the emissions requirements.

According to the regulations, specified generators are categorised as ‘Tranche A’ if they do not take on new balancing services agreements. That gives them until 2025 or 2030 to comply with the new emissions limits. But if they do take on new capacity market or balancing services agreements, they become ‘Tranche B’ generators, and must clean up before 1 January 2019.

Some aggregators argued that, as Triad is not a balancing service, back-up generators used for Triad could become specified generators but remain in Tranche A and be free to do Triad avoidance unabated for at least another six years.

The Energyst asked the Environment Agency if that interpretation was correct. The eventual answer, via Defra, was: “If a Tranche A generator participates in Triad in 2019, it will be classed as a Tranche B generator.”

That means compliance with emissions limits and permitting will be required by 1 January 2019 for firms planning to use back-up generators for Triad next year.

The agency continued: “The rational is that Triads are considered to be a balancing service – unabated operations, which this would be if it is a diesel engine without SCR, will increase emission to air and potentially displace cleaner generators.”

The agency said it will issue guidance on the subject for businesses, but aggregators have criticised the policy development, ambiguous regulations and the subsequent information void for causing confusion.

Businesses now have less than a year to decide whether to fit SCR and continue to provide balancing services as well as perform Triad avoidance.

assets from balancing services agreements and Capacity Market contracts, potentially causing new entrants to rethink or even reverse their investment strategies in this area.”

Association for Decentralised Energy director, Tim Rotheray, also thinks Defra’s proposal is misguided.

Back-up plant has to run as part of a test regime to ensure it works when companies face a power failure, so why not allow firms that are footing the brunt of policy coststo earn money from their testing regimes, he argues.

“The kit is going to run and it has a 50 hour a year limit [under the MCPD], which is fine, no one is opposing that. But Defra changing the rules with no consultation was a complete surprise. Everyone agrees that improving air quality and reducing the amount of diesel in the system is vital. Yet DEFRA has published no evidence that this will improve air quality – and this kit is going to run regardless. How many hospitals [have back-up generators]? They are under severe budgetary pressure and we are taking away their ability to generate revenue from an activity that they are already doing.”

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Mission critical sites and DSR: turned on or turned off?

Abatement costs: a turn off for critical sites?

Philip Branchflower, from SLR Consulting (a consultancy that provides global environmental and advisory solutions), says that the MCPD and the additional generator controls will need to be considered when participating in ‘energy balancing’ applications. If your diesel-fired generator is not already included in an agreement, you will struggle to use your generator for DSR, as it will not meet the NOx emission limits without abatement,” Branchflower comments.

“We are conducting some studies to look at the financial implications of this. Certainly, the costs of adding abatement can run into tens of thousands of pounds, which is not insignificant…Some DSR sites I have spoken to say that [using diesel generators as the mechanism] is not worth the hassle and they will simply look at load shedding and avoid the MCPD Directive entirely.

“The additional generator controls introduced by DEFRA were primarily aimed at STOR-type plants – i.e. those specifically set up to run for 1,000 hours or so, per year, just to balance the grid. These smaller-scale power plants are being targeted to ensure they are better regulated than they used to be; in a consistent way to larger power stations. If you are using gas-fired generators, however, you won’t have too much to worry about in terms of complying with the legislation, but a Permit will still be required along with monitoring and fees to the Environment Agency.”

Branchflower adds that hospitals that have already signed up for DSR using generators have around a year to obtain a permit from the Environment Agency and will need to look at the air quality impact of the emissions.

“There are transitional arrangements, so participating hospitals could have around five years before they need to look at the abatement option. Therefore, if you are already part of an existing agreement, you have some time to manage the investment and decide whether to employ abatement or simply walk away,” Branchflower continues.

Hospitals make up a ‘significant’ part of aggregator Kiwi Power’s portfolio. The firm estimates that the MCPD rule changes could cost the NHS as much as £27m per annum. “The last thing the country needs is for the government to place additional strain on the NHS budget,” says Kiwi’s head of public affairs and UK programme manager, Jonathan Ainley.

“The proposed policy will create a funding shortfall, requiring NHS Trusts to divert much-needed money away from front-line services towards generator maintenance, which is surely an outcome to be avoided,” he suggests.

Ainley is urging DEFRA to reconsider “shutting out the NHS” from DSR. He argues that the department has provided “no evidence as to why backup generators should be excluded from all markets”.

Not everyone thinks the rule changes are bad news.

UK Power Reserve (UKPR), which owns gas, battery

and diesel generation assets, suggests it will force the sector to look at cleaner technologies or fit abatement measures to existing kit.

UKPR commercial development manager Marlon Dey agrees those complaining that ‘easy wins’ have been wiped out have a genuine complaint – but says that is precisely the point: “They would be easy wins. But not all DSR is created equal. If the legislation means it will incentivise aggregators to work harder to harness clean DSR capacity rather than polluting back-up generation, that’s progress towards a green, low carbon future.”

While some market participants suggest the timetable is tight and the cost of fitting abatement technologies to meet the new emissions limits are prohibitive, Dey says that is not UKPR’s view: “The abatement technology is available today and the proposed timescales for implementation are feasible.” UKPR is also skeptical of the view that ‘hospitals will suffer’ due to the MCPD rule changes.

“This isn’t an issue around hospitals – the legislation is being passed to reduce emissions, improve air quality to benefit public health and meet our environmental objectives. Out of all the generation assets in the UK, there is only a small fraction of assets being aggregated from hospitals,” says Dey. “It is unclear how much a hospital might be affected, but they can continue to operate like everyone else so long as they are compliant,” he concludes.

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Mission critical sites and DSR: turned on or turned off?

Converting UPS assets into DSR revenue With the introduction of the medium combustion plant directive (MCPD), the focus is now on technologies such as UPS and batteries for DSR engagement. The UK has more than 4GW of stored power in UPS units and harnessing that power could become crucial in tackling the nation’s energy dilemma.

“The typical way of performing DSR, previously involved diesel generators, but we are trying to reduce reliance on coal-fired power stations, in the UK; by using a diesel generator you are still burning fossil fuel – you are simply moving where that fossil fuel is burnt, around the grid,” comments Leo Craig, general manager, Riello UPS. An obvious solution is to use UPS systems – these need to be above 10kVA to be suitable for DSR applications. However, the battery technology is also key. Craig explains that lead acid batteries are unsuitable for DSR, as they take eight hours to recharge (to 80%), under normal recharging regimes – this means they cannot be used for other applications during this recharging period. They are also only designed for around 500 recharges and discharges in their lifetime. The only way to use UPS for DSR applications, therefore, is to opt for alternative battery technology.

“There are some interesting developments in battery technology emerging, that will be usable in 10-15 years’ time; one that we can use already is lithium ion. Due to the increase in use of lithium ion battery technology, within the automotive sector, the price has come down significantly – making it a viable option for UPS applications. These batteries require 50% less space and can be recharged and discharged up to 10,000

Putting resilience to the test Stuart Duncan, a DSR expert from Ørsted, agrees that the impact of the medium combustion plant directive will create some challenges for current participants in DSR: “Utilising UPS as a source of flexibility will certainly provide a less challenged approach to participation and as such be an attractive source of demand-side flexibility.

“Utilising UPS for DSR is actually a good method of ensuring your operations are robust. In many scenarios these assets are under-utilised as the grid is, in fact, very reliable. Its only when they are called upon in anger that you may find that the battery is degraded and unable to perform its duty.”

Vertiv’s VP, Power Sales and Business Development, EMEA Emiliano Cevenini, agrees that UPS and battery combination is an effective way to participate in DSR, earn revenue and manage your maintenance obligations of a critical site’s back-up power. However, he concedes one of the problems was self-created by the industry.

“It is true we used to sell on fear; fear of power failure and the need for secure and immediate back-up. Now we are saying that It’s all fine and you can use it for revenue generation selling into flexibility markets. The point is you still need the UPS and yes you can do DSR but it need to be managed across both the battery and the UPS”.

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Mission critical sites and DSR: turned on or turned off?

time during their lifetime, while a key benefit is that they can also be recharged (up to 80%) within 30 minutes,” comments Craig.

“Because our UPSs are smart grid ready, the UPS can be set up so that it leaves 15-20 minutes autonomy in the battery for ‘disaster’ applications, ensuring backup power, while the battery can still be used for DSR – you get the best of both worlds. Because lithium ion batteries require 50% less space, compared to lead acid, you can install double the amount of batteries.

Half of this could be for existing loads and disaster recovery and the other half could be used for DSR,” he explains.

The increasing use of renewables in Europe also means the Grid is having difficultly stabilising frequency. A UPS, if controlled in the right way, in a smart grid application, can help with frequency stabilisation.

“In Europe, we are also seeing penalties for going over tariffs – the same technology used for DSR can be used to perform peak shaving. If the load goes above the tariff, sites can use the battery to ‘clip’ that load for a short duration of time.

“Therefore, the UPS can put energy back into the grid, provide frequency stabilisation (which is currently being trialled for the German national grid), and peak shaving of ‘spikey’ loads,” comments Craig. “The UPS is becoming the energy ‘gateway’ between the grid and the user’s applications.”

Persuading mission critical organisations to consider DSR in the first place can prove a challenge, however.

By using the right technology, risk can be avoided, but some also take the view that “the stability of the grid isn’t their problem”, according to Craig.

He argues that the revenue opportunities go straight to an organisation’s bottom line, without adding cost, but more important is the issue of corporate responsibility.

these projects – not just to themselves but to the nation. DSR is good for businesses, good for the national grid and good for the general public,” Craig continues.

Tried and tested technology Riello’s UPS technology was utilised for a DSR project, funded by Innovate UK and led by KiWi Power along with energy storage consultant Swanbarton. This involved the creation of a ‘virtual power plant’ to support KiWi Power’s London office.

The energy storage project employed lithium ion battery technology from GS Yuasa in conjunction with a Riello 20kVA MultiSentry UPS. This was selected for KiWi’s system as it supports power ranging from 5-12kW and had the capability to work with Yuasa’s deep cycling batteries.

To virtual power plant is able to operate in ‘discharge’ mode, where the office load is removed from the mains supply and supported by the battery; a ‘hold’ mode, where the office load is supplied from the mains with the battery remaining in a static state of charge; and a ‘charge’ mode, where the office load is supplied from mains while the battery is recharged at a programmable rate.

In the event of a mains failure, the normal UPS mode is restored immediately to support the office load. The choice of operating mode is made by a micro grid storage manager (MGSM) developed by Swanbarton.

This collects information on the National Grid status, battery state, local load and aggregated load conditions.

Energy storage or DSR? Nick Heyward, of storage specialist Origami Energy, suggests that storage is less disruptive to business operations than DSR. He argues that energy storage overcomes DSR limitations by providing a separate source of flexibility, distinct from any associated processes or machinery.

“DSR may only be financially neutral to the business, in some cases, but from a corporate responsibility perspective, it is in their interests to help out the national grid; we are going to run out of power – especially when we all start to charge our new hybrid cars every night. Critical sites cannot afford to stick their heads in the sand.

Heyward comments: “The capital cost of energy storage is a key factor for businesses. While using DSR services usually incurs some costs due to modifications to asset controllers, staff training and so on, it is significantly cheaper in comparison to a new storage system.

“We need to help businesses understand that they have a responsibility to get involved with

“However, purchasing a system outright is not the only way to adopt energy storage. Financing options are

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Mission critical sites and DSR: turned on or turned off?

UPS as a reserve During extensive trials, Eaton has demonstrated that UPS systems and batteries can be safely and effectively used to perform DSR operations, without any risks to the UPS’s primary function. The company’s UPS-as-a-Reserve (UPSaaR) technology, launched at the end of 2017, enables sites to earn from their investments in UPS, while helping energy providers balance sustainable energy demands.

Svenska kraftnät, in Sweden, has selected the service for a pilot project researching the utilisation of energy storage for demand flexibility. Fortum will offer 0.1 MW of UPS capacity to Svenska kraftnät’s frequency-controlled disturbance reserve. This reserve activates automatically and quickly if there is a drop in the electricity network’s frequency. Eaton’s UPSaaR technology gives data centre operators an opportunity to work with energy providers to momentarily reduce the power demands of the data centre and even return power to the grid. A data centre could expect to raise up to €50,000 per MW of power allocated to grid support per year.

Commenting on what this pilot project represents for the UK data centre market, Mike Byrnes, Director, Data Centres, Eaton EMEA, said: “The energy demand and supply model in the data centre market is starting to change. We are at an inflection point. More flexible battery technologies, new alternative or green energy providers and regulatory pressure on the use of diesel combustion engines mean that new avenues are being explored by data centre operators. They need to meet increasing demands, maintain uptime but also look at power efficiency on a grid scale versus a building scale.

“At a grid level, an ecosystem is evolving and data centre operators have a critical position – even a responsibility of leadership. The energy systems of the near future will certainly be more diverse but most data centre operators will still have to store vast amounts of power.

“On the grid side, Svenska kraftnät has recognised the benefits but it is not alone. Large data centre operators, including many in the UK, are sitting up and taking notice too.”

now widely available that reduce or eliminate capital expenditure.

“Models vary, but many solutions involve a benefit share with the site owner, using a proportion of the income generated to cover the cost of the asset over a minimum contract term. This allows site owners to unlock the enhanced benefits of energy storage at an equivalent or lower cost to DSR.” He adds that the capacity available may be drawn on at any time without any discernible impact on welloptimised site operations. On dispatch of a response from the storage asset, the site simply changes how much power it draws from the grid versus the storage. Ørsted’s Stuart Duncan suggests that a hybrid approach may be the way forward: “Energy storage / batteries will ultimately just be another means for end users to participate in DSR; behind-the-meter energy storage, perhaps integrated with some form of onsite generation, is currently the most attractive business case for energy storage. Diesel gensets will probably be the first DSR systems to be priced out of the market by batteries.”

Conclusion While DSR remains a ‘turn-off’ for some, there are growing numbers of critical sites switching on to renevue generating schemes. However, building confidence in the viability and safety of DSR will require the publicising of adoption. Sharing experiences and learning across industries will help these sectors engage in this market, secure in the knowledge that others have tried and tested this approach in similar environments.

There is a need to encourage more open discussion and this will require a change of mindset for those sectors where non-disclosure has become ingrained in the operating culture.

There is a common goal, underpinning the imperative to share learning: it is in all our interests to ensure a secure, sustainable and affordable electricity system.

Perceived risk is still holding back many mission critical sites from engaging with DSR. One counterargument, often put forward, is that by participating in DSR initiatives, equipment will have the opportunity to 21

Mission critical sites and DSR: turned on or turned off?

run on load, so it is much more likely to deliver when required.

DSR may not be for everyone, but aggregators argue that the risks can be mitigated with the right approach, technology and expertise. It is likely that the new legislation around generators and emissions will lead to some sites dropping out of the DSR market. However, as the cost of other DSR enabling technologies continues to come down, other approaches to engaging in DSR, such as UPS and batteries, are expected to overtake.

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Ultimately, there is still a big learning curve for many critical sites evaluating the opportunities, and the complexity of the market can be daunting. “The biggest complaint we hear about DSR is that for every aggregator a potential customer speaks to, they hear a different story as to what DSR actually is,� comments Michael Phelan, GridBeyond’s CEO. Clearly, there needs to be greater clarity. Many mission critical sites simply do not understand enough about the market and the different options to make a decision.

Mission critical sites and DSR: turned on or turned off?

Dr Philipp Grunewald, an expert on DSR from Oxford University, concludes: “We should learn more about opportunities for genuine load shifting and demand turn down (and reduction). This obviously requires more effort and is still somewhat uncertain in its scale and potential, but if we want to achieve our legally binding emission reduction targets, we better explore all options.�

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