National Grid to investigate whether businesses could be incentivised to use excess wind energy at night

Out-Law News | 08 Jan 2014 | 4:08 pm | 2 min. read

Factories and other energy intensive businesses could be incentivised to use excess wind power at times of lower demand, such as during the night, under plans being explored by National Grid.

Energy expert Chris McGarvey of Pinsent Masons said that the proposal, which was first reported in Process Engineering magazine, could potentially be cheaper for the system operator than the cost of the constraint payments it makes to wind farms to reduce or switch off their energy generating capacity at these times.

"Managing increasing intermittency on the electricity system poses one of the biggest challenges to the decarbonisation of the electricity sector, and it is encouraging to hear that National Grid is exploring all available options," he said.

"Whilst it is very unlikely that there is sufficient elasticity in electricity demand to fully absorb the excess volumes generated during these periods, it could play a meaningful role alongside other longer term initiatives such as pumped storage, recharging of electric vehicles and ultimately more novel forms of energy storage such as compressed air and hydrogen fuel cells," he said.

A spokeswoman for National Grid told Out-Law.com that development of the scheme was in the very early stages.

"We can't say that this service will definitely go ahead – we still have work to do on feasibility and costs - but as System Operator we want to make sure we operate the grid as efficiently and economically as possible," she said. "If there is a possibility to reduce those costs, and make the best use of wind on the system, then we will."

"We are looking at a service where 'useable' demand can be shifted to make better use of renewables. Throughout the night, for example, demand is lower but the wind is still blowing. Wind in fact usually makes up a substantial part of the generation mix during the night. There may be industrial and commercial businesses that could shift their demand to night-time and make use of the renewable generation available," she said.

According to Process Engineering, the cost of constraining wind power generation is rising as more wind farms are connected to the grid. Payments are expected to rise to an expected £27.9 million by the end of this financial year, up from £7.6m in financial year 2012/13. As part of last year's 'industrial strategy' for offshore wind, the Government set out its intention to increase the UK's installed generating capacity to 16GW from 10GW at present by 2020, which would further increase these payments.

Chris McGarvey said that although differential pricing between periods of peak and low demand had been in existence for "decades", the proposal being discussed could result in businesses receiving "positive cash payments" to increase their consumption when wind conditions were optimal, energy generation high and demand low.

"Whilst this may seem counterintuitive, it is a sensible proposition when compared with the alternative of constraining generation off the system at potentially higher cost," he said.