By their very nature aggregates and mineral businesses are inevitably high energy users. Sonya Bedford of Stephens Scown LLP explains how savings can be made by using “demand side response”.
Demand side response is a method of saving energy and maximising energy use. Think of it as a smart grid for maximising energy use. The “demand side” is you, the high energy user, and by responding to your energy use (by turning up or down) savings can be made and intelligent choices made about the energy you use.
Current estimates suggest that only 10% of demand response potential is being tapped, so this is an area that may grow in significance over the coming years, as EU member states are under increasing pressure to meet their carbon reduction targets.
There are lots of potential applications for demand side response:
• The system operator can use demand side response to balance electricity supply and demand.
• By reducing peaks on the transmission and distribution networks, demand side response can reduce reinforcement costs for the Distribution Network Operators.
• Energy suppliers may use demand side response to reduce the wholesale costs faced by their customers, or reduce their exposure to imbalance charges.
• High energy users will be able to shift load demand and save money on energy bills.
Demand side response in the UK
In the UK the National Grid is currently running a programme called Power Responsive. Businesses are being encouraged to make money, reduce their bills and cut their carbon footprint by getting involved in demand side response.
High energy users using demand side response provide flexibility in the grid network which enables the National Grid to balance Britain’s electricity system cost-effectively, while nationally, carbon footprints are cut with far reaching benefits.
A high energy-use business can get involved in demand side response through a national programme or though monitoring their own energy use. It works by the businesses increasing, decreasing, or shifting its electricity use in response to a signal. There is obviously a financial return in doing this, but also the environmental benefits are high. Businesses can get involved in demand side services through an aggregator, supplier or other third party.
Aggregate Industries: demand side response in action
In the UK, Aggregate Industries is setting an example by taking part in the National Grid’s power responsive project. Aggregate Industries partnered with Open Energi to identify activities, which fit the dynamic frequency response management profile.
On its website, Aggregate Industries explains its approach: “In other words, activities where we can safely automate the switching on or off of power – without affecting quality – in order to help balance the grid. We found that turning off our bitumen tank heaters to respond to short-term fluctuations in supply and demand doesn’t affect the quality of our product at all: bitumen is stored at between 150-180 degrees centigrade, and the heaters on modern, well-maintained and insulated bitumen tanks can be switched off for over an hour with only a one-degree change in temperature. The tanks’ temperature bands act as control parameters; if the temperature is within those bands switching can take place automatically, or if not, nothing happens.”
The equipment uses frequency signals as a cue, and so far Aggregate Industries is reporting that the intervention is invisible and has had no impact on its operations. Aggregate Industries is paid its availability, regardless of how often it is required to respond.
The EU position
The Electricity Directive and Energy Efficiency Directive covers the issue of demand side participation. The Energy Efficiency Directive calls on member states to remove incentives in transmission and distribution tariffs that might hamper demand response participation.
Member states must also ensure that their national energy regulatory authorities encourage the participation of demand side resources, such as demand response, alongside supply in wholesale retail markets. The legislation also requires member states to ensure that network operators are incentivised to improve efficiency in infrastructure design and operation and that tariffs are put in place that allow suppliers to improve consumer participation in demand response.
Managed correctly, demand side response can offer aggregate and mineral businesses a chance to reduce their costs, as well as helping member states to work towards their carbon reduction targets.
Sonya Bedford is head of the renewable energy team at Stephens Scown LLP. The firm has experience of helping its clients with demand side response and has produced a White Paper on Local Energy Supply, which is available on
Sonya can be contacted on +44 (0) 1392 210700 or by emailing <%$Linker:
