Hotel case study

Introduction

A hotel owner is looking to provide flexibility services to Electricity North West through a Peak Reduction contract by reducing their electricity demand during peak hours.

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 when required during a pre-agreed service delivery window, and provide at least 10kW of flexible 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 us. 

Delivering a Peak Reduction service via demand reduction

Hotel owners can participate in Peak Reduction flexibility services using a number of their assets, such as EV charge points, heat pumps, smart appliances, refrigeration, pumping, air conditioning, batteries, etc. These are processes and assets whose electricity demand can be adjusted for short periods with no impact on day-to-day business operations. In this example, the hotel has a heat pump installed which can be controlled to manage the heat pump’s demand profile when required (asset metering).

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 reinforcement requirements. To be notified of our upcoming tenders, the hotel owner signs up to our flexibility mailing list.   

Before the launch of the tender, the hotel owner:

• 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 hotel'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. The hotel owner can sign up to the general T&Cs of this agreement as part of commercial qualification, and a signed copy must be returned via Electron before placing a bid.
• Registers its asset(s) on ElectronConnect.

Tender process 

Pre-qualification

Once the Invitation to Tender (ITT) has been published, the hotel owner reviews the network’s flexibility service requirements using the map included in our latest flexibility service requirement. Once they have established that their hotel is located within a requirement zone seeking a Peak Reduction service, they calculate how much of the required demand response they can offer, when, and at what price. Before submitting a bid, the hotel owner uses the cost calculator tool on our website to check that the prices they are prepared to offer for 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 service requirement. At this point, the hotel owner decides they would like to participate in the tender.

The next step for the hotel owner is to complete technical qualification on ElectronConnect by confirming the asset(s) they wish to put forward in the competition, i.e. in this example the heat pump. Electricity North West then assesses the technical details of the participating asset and the capability for delivery. If the hotel is unable to provide 10kW of flexible capacity, 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 a separate case study. The hotel owner is notified via ElectronConnect that their asset meets the requirements of this tender, allowing them to move to the bidding stage of the process. 

Submitting a bid

For the final stage of the procurement process, the hotel owner submits a bid to the tender on ElectronConnect. This is done by linking the pre-registered asset to the peak reduction product, as well as the periods where the hotel can commit to reduce its demand peaks. 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 hotel owner’s bids are successful, they will enter into a flexibility services agreement with Electricity North West to deliver the service within the required service windows.