High street retailer Marks & Spencer is seizing the opportunities on offer through demand side response (DSR).
Maria Spyrou, the company’s energy efficiency programme manager, explains why getting involved in the Short Term Operating Reserve (STOR) scheme and the Capacity Market, on top of Triad avoidance, is the right fit for the business.
Our business requires a large amount of energy to operate – covering our distribution centres and offices as well as hundreds of stores across the UK. We need that energy to keep our stores lit, food lines refrigerated and our customers and employees comfortable with adequate heating, ventilation and air conditioning (HVAC).
As a responsible business, it is important we use energy efficiently. We have a strategy – Plan A – to reduce our environmental and social footprint. A key commitment is reducing energy consumption. Since 2007 we have been working with internal and external stakeholders to put solutions in place that have improved our energy efficiency by 39 per cent.
Our move into DSR was a natural evolution for us. Having worked with E.ON for the past eight years on energy efficiency enhancements in our stores, E.ON now also manages our participation in two DSR market products − STOR and the Capacity Market – plus Triad avoidance.
The potential benefits of DSR are really attractive. As well as contributing to security of supply and generating additional revenue we are also supporting our corporate social responsibility goals. In a recent report by National Grid it was stated that by running the STOR scheme through a range of non-synchronised units in 2014/15 it provided an estimated carbon offset of 79% over the synchronised equivalent (CCGT).
In terms of the products, STOR is National Grid’s most important source of back-up energy. The minimum requirements for STOR are that you are able to provide at least 3MW of either generation or demand reduction and can deliver that for at least two hours.
Meanwhile, through our Capacity Market obligation, we have made a long-term commitment to supply an agreed level of capacity to the system.
The potential benefits of DSR are really attractive. As well as contributing to security of supply and generating additional revenue, we are also supporting our corporate social responsibility goals.
So how are we delivering this capacity and helping to balance the system?
First of all, we are switching off our non-critical loads, specifically HVAC, when the grid requires additional capacity during peak demand periods. And secondly, we are using the generator assets we already have in our stores – usually only used to power our business in a power cut – to generate additional electricity during periods of peak demand.
Getting the business ready to participate in this scheme required extra work and investment. We use a central energy management platform to help control energy use across our sites. At the beginning of this project, all of our lighting and many HVAC assets were already connected and controlled, but our generators were not.
With the help of E.ON, we connected all our additional assets to this central platform so they could be remotely controlled to deliver the services when needed.
Another key part of getting up and running was liaising with the relevant Distribution Network Operators (DNOs) to ensure that our generators could run in parallel with the grid safely, and in some cases that power we generated could be exported to the network. With all the work complete we have HVAC assets in 25 stores available and online, so we can control and shift loads as required. In addition, 13 of our sites – with many more planned – have had their generators upgraded to supply power to the grid when called upon.
All participating sites successfully went through Capacity Market testing in August and STOR delivery kicked off in September.
One unexpected benefit is that, by keeping our generators online for providing flexibility to National Grid, we are more confident they will run successfully if a power cut did occur. This added reliability has been well received by the company’s decision makers.
We are really happy with progress so far and are putting together a business case for phase two. This would see more sites, including larger ones such as our distribution centres, coming online as well.
My advice to any business unsure about participating would be to talk to National Grid, Demand Aggregators or other third parties to explore the best way for them to profit. I was sceptical initially, but as long as you have all the right controls in place, I believe there is little risk to your sites or operations from taking part in DSR.
It’s already made our generation assets more reliable, brought in extra revenue and allowed us to contribute to security of supply − an important issue as we move towards a more sustainable future energy system.