University case study
Introduction
A university which has energy storage assets and a diesel generator on its site is looking to provide flexibility services to Electricity North West through an Operational Utilisation contract by increasing/decreasing electricity supply or increasing/decreasing electricity demand during peak times or unplanned outages/faults.
About flexibility services
When the demand for electricity is greater than the amount that Electricity North West can provide, we procure flexibility services to alleviate constraints on our network during peak times. These services are provided by companies or individual customers known as flexibility service providers (FSPs) who own assets in our region such as generators, battery storage and electric vehicle (EV) charge points. FSPs should be able to generate more, or use less, electricity during a pre-agreed service delivery window, and provide at least 10kW of flexibility capacity either individually or via an aggregator. This allows us to balance supply and demand, ensuring a safe and reliable supply of energy for our customers. In return for providing extra capacity, FSPs receive payment from Electricity North West.
Delivering a Peak Reduction service via demand reduction
The Operational Utilisation service is a pre-scheduled product that is procured to manage daily demand peaks or post-outage/fault response on the network.
There are a number of ways the university can adjust its energy demand and supply to deliver the Operational Utilisation service during the required window. These could include using energy storage assets (such as batteries) and a temporary diesel generator already installed on the campus.
Battery energy storage enables demand flexibility by storing surplus energy during periods of low demand (for example late at night or early morning) and releasing it during peak hours (for example between 4-8pm on a winter’s day), so that the site does not have to draw from the grid. By participating in this service, the university can store energy from solar or direct from the grid at off-peak times which is then used if requested during pre-arranged hours of participation.
Diesel generators can be used to provide temporary dispatchable power generation to the grid during network constraints, help power flow during a fault/outage, or even to limit the power imported by the university from the network during peak hours.
Pre-tender
Our tenders are published on the ElectronConnect platform twice a year in spring and autumn in line with our Network Development Plan (NDP) and Distribution Future Electricity Scenarios (DFES) publications to reflect our latest network requirements. To be notified of our upcoming tenders, the university signs up to our flexibility mailing list.
Before the launch of the tender, the university:
- Registers on ElectronConnect to pre-qualify to participate. The information submitted such as credit checks and insurance details is assessed by Electricity North West. Once approved, the university's commercial qualification remains valid for future tender rounds.
- Electricity North West utilises the framework style Standard Flexibility Services Agreement developed by the Energy Networks Association Open Networks Project.
- Registers and pre-qualifies the assets it wishes to put forward in the competition.
Tender process
Pre-qualification
Once the Invitation to Tender (ITT) has been published, the university reviews the network’s flexibility service requirements using the map included in our latest flexibility service requirement. Once it has established that its assets are located in a requirement zone seeking an Operational Utilisation service, it calculates how much of the required demand response it can offer, when, and at what price. Before submitting a bid, the university uses the cost calculator tool on our website to check that the prices it is prepared to offer for availability and utilisation don't exceed the ceiling price that we are offering for the service as part of this tender round. The cost calculator can be found in the ITT appendices for our latest flexibility services requirement. At this point, the university decides it would like to participate in the tender.
The next step for the university is to complete technical qualification on ElectronConnect by confirming the assets it wishes to put forward in the competition. Electricity North West then validates where the battery storage assets are connected to our network and that they’re eligible to participate, assesses the technical details of the participating assets and their capability for delivery. If the university does not have 10kW of flexible capacity to offer it can still take part via an aggregator. Aggregators such as electricity suppliers combine load from multiple customers to provide flexibility services; this is explained in more detail in our homeowner case studies on Peak Reduction and Scheduled Utilisation. The university is notified via ElectronConnect that its assets meet the requirements of this tender, allowing it to move to the bidding stage of the process.
Submitting a bid
For the final stage of the procurement process, the university submits a bid to the tender on ElectronConnect. This is done by linking the pre-registered assets to the utilisation payments, as well as the periods when the university can respond. Once the bidding window has closed, Electricity North West assesses the tender responses before accepting or rejecting bids based on the proposed payment and the asset’s ability to meet the specification. If the university's bids are successful, it will enter into a flexibility services agreement with Electricity North West to deliver the service within the required service windows.
Helpful tips to consider before submitting a bid
- Prices should be made up of a utilisation payment. Utilisation is the price paid to the provider for the level of response they have actually provided on request. Note: Electricity North West will not always use as much energy as it has requested in the service window; there is a level of over procurement built in to ensure that there will be a sufficient response available if required.
- When calculating the tender bid prices the provider should consider the cost of lost revenues, fuel costs, environmental or permit fees, initial set-up costs, maintenance, other revenue streams available, energy savings benefits etc.
- When thinking about the utilisation periods the provider should consider the practicalities of these periods, the processes required to ensure that the service can be delivered, seasonal considerations e.g. increased demand during sport events, major television events, Christmas period, weather-related issues (e.g. extreme cold weather increasing the heating demand) and maintenance periods.
Flexibiity service products
Electricity North West procures four common products (services), which align with the Open Networks service definitions:
- Peak Reduction
- Scheduled Utilisation
- Operational Utilisation
- Operational Utilisation & Variable Availability.
The Operational Utilisation product is designed to provide a post abnormal event ability to quickly reduce network demand and restore network supplies following an unplanned outage/fault. Typical examples of usage would be network faults, extremely unlikely demand peaks caused by unplanned events (weather, sporting events, major televised events), or under-delivery from another FSP.
The service window(s) will be agreed in advance in the contract with Electricity North West. Electricity North West will also provide an estimation of the level of response that will actually be required.
Dispatch
The university is expected to be ready to respond to utilisation calls within the agreed response time (15 minutes maximum). The assets will be dispatched for the level of service that is required based on actual network measurement data. The university can choose to receive dispatch instructions via application programming interface (API), email or our remote terminal units (RTUs).
Baselining
A baseline is a reference used to measure the amount of flexible capacity delivered to the network by FSPs. There are different kinds of baselining methodologies used depending on the type of asset and service being provided. These include historical baselines (using past meter readings to estimate the baseline using standard algorithms) and nominated baselines (using other forecasting techniques such as weather-based models to estimate the future baseline). The baselining methodology will be agreed between Electricity North West and the university post contract award and at least six months before the first utilisation period. More information on the different types of baselining methodologies can be found on our FAQs page.
Payment
Utilisation payments will be made to the university for responding to Electricity North West’s dispatch request during the service window(s). Payment is awarded on successful delivery of the services and will depend on the level of response actually provided on request. It is measured in £/MWh.
It is noted that the utilisation fees payable to the university under this product are subject to Electricity North West’s actual utilisation of the university’s flexibility services closer to real-time. The university will not be paid for being available (standby) to respond to Electricity North West’s dispatch signals and will not receive any payment if there isn’t any need for utilisation of the assets in real time.
Invoicing
Subject to the delivery of flexibiity services, the university will invoice Electricity North West and receive payment by bulk electronic clearing (BACS) by the end of the following month (after the invoice is received).
It is noted that:
- Over-delivery is not paid and cannot be used to compensate for under-delivery during another dispatch request.
- The university is not entitled to any payment during the response time.
More details on invoicing and payment can be found in the terms and conditions of each Invitation to Tender.
Worked example
The university has a battery with 500kW of power capacity and a diesel generator of 400kW capacity and has signed an Operational Utilisation service (demand turn-up/down and generation turn-up/down) contract with Electricity North West. The university has a metered import capacity (MIC) of 2,000kW.
The university can:
- Reduce its demand by up to 900kW in total, 500kW by using the batteries (assuming they are fully charged) and 400kW by using the diesel generator (assuming it is fully re-fuelled) to meets its own electricity requirements during peak hours.
- Increase its demand by up to 500kW by charging the batteries during periods of low network demand.
- Release (generate) power to the grid up to 900kW in total, 500kW by using the batteries and 400kW with the generator, to provide post-fault response or during daily demand peaks.
The batteries can run for up to three hours and need one hour to fully re-charge (i.e. restoration time). The generator can run for up to four hours and needs one hour for re-fuelling (i.e. restoration time).
In this example, for demand reduction/ generation increase, the service window period is November-March every Monday-Friday between 3pm-8am and for demand increase it is 24/7 all year round. The university can respond to utilisation requests within ten minutes.
Utilisation dispatch (demand reduction): It is assumed there is a network constraint on a weekday in December. Electricity North West sends a utilisation dispatch request in real-time to the university to reduce its demand by 500kW between 3pm-6pm. The university must respond to the utilisation call within 15 minutes from receiving the dispatch signal. It can respond by covering its energy demand by either using the stored energy in the batteries or by using the diesel generator or both. If the university successfully manages to reduce its demand within ten minutes, it will receive payment for decreasing its energy consumption by 500kW x three hours = 1500kWh (or 1.5MWh) in its demand profile between 3pm-6pm compared to its expected energy demands (based on its historical demand profiles).
Example: the university responds to a utilisation instruction for demand reduction using its batteries (site metering)
Utilisation dispatch (demand increase): It is assumed there is generation surplus on the network on a sunny Sunday in July. Electricity North West will send a utilisation dispatch request in real-time to the university to increase its demand by 200kW between 7am-9am. The university must respond to the utilisation call within ten minutes from receiving the dispatch signal. It can respond by charging the batteries. If the university successfully manages to increase its demand within ten minutes, it will receive payment for increasing its energy consumption by 200kW x two hours = 800kWh in its demand profile between 7am-9am.
Example: the university responds to a utilisation instruction for demand increase using its batteries (asset metering)
Utilisation dispatch (generation increase): It is assumed there is a demand peak on the network on a weekday in December. Electricity North West sends a utilisation dispatch request in real-time to the university to increase its generation by 700kW between 3pm-5pm. The university must respond to the utilisation call within ten minutes from receiving the dispatch signal. It can respond by releasing the stored energy in the batteries and using the diesel generator to generate electricity to the grid. If the university successfully manages to increase its generation within ten minutes, it will receive payment for generating 700kW x two hours = 1400kWh (or 1.4MWh) of energy between 3pm-5pm.
Example: the university responds to a utilisation instruction for generation increase using its batteries and the generator (asset metering)
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