Hospital earns £100K a year from flexible generation and DSR

Colchester Hospitals

In a win-win situation, two Colchester hospitals are generating income and helping National Grid balance supply and demand across the network.

Colchester Hospital University NHS Foundation Trust was one of the first NHS Trusts to see the potential of the Demand Response Scheme (DSR) for generating revenue while helping balance supply and demand across the grid. Dr Vall Rasaratnam, formerly Energy and Sustainability Manager at Colchester, explains.

Colchester Hospital University NHS Foundation Trust, where I was Energy and Sustainability Manager until 2015, has two main sites, Colchester General Hospital and Essex County Hospital. The Trust employs more than 4,000 staff providing healthcare services to around 370,000 people from Colchester and the surrounding area of north-east Essex.

Having access to a constant power supply is literally a matter of life and death for the UK’s NHS hospitals, which is why they all have emergency back-up electricity generators.

With NHS finances under constant pressure, the more forward-thinking NHS hospitals are working with demand response aggregators and National Grid to use these generators to create a new revenue stream – and help National Grid balance supply and demand. This was something I was very keen to become involved in, as I had been aware of a similar scheme working very successfully in the US.

Seamless switchover

Following an overhaul of the Trust’s mechanical and electrical infrastructure in 2012, we were approached by demand response aggregator KiWi Power. It proposed a scheme to install hardware and software that would help us realise the full potential of our generators and provide demand response for National Grid to call upon.

Before DSR we routinely ran our generators to test them for a set 10 hours a month. Our base load was 1.6MW and we had the potential to generate 3.6MW, giving us an export capacity of 2MW. Under DSR, we now switch to our own generators at times when the system requires it – a request that’s made by National Grid via KiWi Power. This proves the resilience of our generators, and we also receive a payment for being available and for the electricity that we export to the grid.

For this system to work you do need to have well-maintained generators as they have to be able to react immediately. You also need to have the right hardware and software to ensure a seamless switchover when a generator is called on because the hospital cannot afford to have any downtime. This is where KiWi Power’s expertise came in.

A convincing business case

KiWi Power provided a detailed project management plan with installation and risk assessments. I was able to make a convincing business case to persuade the Trust’s board to support the equipment upgrades required to participate in demand response. The payback for the cost of the equipment was only two to three months.

We benefit from a new and recurring revenue stream through National Grid’s STOR (Short-Term Operating Reserve) programme and it allows us to realise a key objective: to upgrade and improve the resilience of the hospitals’ generators.

The solution designed by KiWi Power allows the generators to be remotely controlled when National Grid activates a demand response event. The diesel generators synchronise to the mains and export spare capacity back to the Grid, using the fully automated internet protocol solution provided by KiWi Power.

Relevant members of staff at the hospital are automatically notified. I would get a text message and a call giving me notice of the demand response event so I could check quickly whether the generators were undergoing maintenance or had broken down, and override the automatic system if necessary.

The bottom line

The Trust benefitted with over £100,000 of annual revenue, with all set-up costs paid by KiWi Power. There was no disruption to our site operations and we gained access to real-time energy management information which helped us improve our energy monitoring. We were also able to reduce our CO2 emissions as on-site generated power has a lower emission factor than that supplied through the grid.

A further benefit was provided by KiWi Power in remotely managing our peak tariff avoidance, better known as ‘triad’, something we used to have to do manually. To explain, National Grid nominates three peak tariff periods during a winter period when domestic demand is especially high and the cost per KWh for major energy users rises enormously. This encourages us to either reduce demand or switch to other sources during peak periods. The three peak tariff periods vary so we are given around 20 days prediction of when they will occur.

Switching to our generators at those peak times gave us around a £50,000 rebate. When I was at Colchester, having automated triad management meant we were able to switch to our own generators on all our triad days and avoid peak charges.

Having had the experience of providing demand response for National Grid, I am convinced that more NHS hospitals should become involved as everybody benefits.

“We were particularly impressed with KiWi Power’s work for the Trust in maximising our generator operating revenue within a short period of time. KiWi Power commenced our programme with just 1MW base load and within two months they installed and connected a further 0.4MW. KiWi Power assists with full 3.8MW export capacity providing earnings of over £100K per year!


KiWi Power also carries out our peak tariff avoidance (Triad) remotely now meaning we make considerable savings and no longer have to operate this manually. KiWi Power has carried out triad management for us providing consistent savings in an ever increasing cost market.” Call Rasaratnam, former Energy & Sustainability Manager, Colchester Hospital University NHS Foundation Trust

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