United Cast Bar, a leading foundry producing up to 45,000 tonnes of continuous cast iron bar annually, is benefitting from the adoption of Firm Frequency Response (FFR), a revenue generating scheme that forms part of the National Grid’s broad DSR (Demand-Side Response) portfolio.
With its own distribution network in Europe, Chesterfield-based United Cast Bar is a major player in the continuous cast iron bar market. In fact, the company has the largest portfolio among any of its peers worldwide, offering from 25 to 700 mm round continuous cast iron bar, square bar up to 550 mm, and section up to 750 x 550 mm. Approximately 90% of the foundry’s output is exported, 80% to EU countries.
Challenges & Actions
Despite its success in the marketplace, the company’s Managing Director, James Brand, is always on the lookout for additional revenue streams, and upon discovering a little about FFR, decided to investigate further.
HIGH REWARD OPPORTUNITY
In simple terms, FFR is the generation or removal of sufficient load from the National Grid to stabilise frequency. The Grid is prepared to pay such high rewards as it has an obligation to ensure that sufficient generation and/or demand is held in automatic readiness to manage all credible circumstances that might result in frequency variations.
To ensure the success of such schemes, the National Grid offers those that participate the potential to earn extra income from assets by automatically adjusting power consumption in real-time. The financial and operational benefits for participating companies can be very significant, with sums of up to £70,000 achievable for every megawatt (MW) of average onsite energy consumption saved. This is in return for around six (on average) ‘turn-down’ events per year, lasting for a maximum of 30 minutes each.
“The opportunity to earn sums like this for a controlled risk meant I was prepared to take it to the next stage, and the CMF put me in touch with Endeco Technologies” says Mr Brand. The company duly responded with a visit and delivered an informative presentation. After further discussions with his management team, Mr Brand decided to set the process in motion.
Endeco Technologies is a National Grid approved aggregator that can help businesses such as United Cast Bar to make the right choices and optimise returns. In addition, it takes care of the necessary hardware and software installation, as well as the online monitoring and reaction systems, and the day-to-day running of the system. All of this is provided without any capex requirement, with the aggregator simply taking a share of the scheme pay-out instead.
“We agreed a certain amount of contract flexibility with Endeco Technologies, including our preference to amortise the hardware and software over the first two months,” says Mr Brand. “This meant that by the third month we would be generating the full income.”
It was decided that United Cast Bar’s two main Inductotherm melt furnaces would be suitable assets to shut down during an FFR event. Furnaces are the most energy-intensive items at any foundry and it was estimated that this would provide an average available load of 1.972 MW for the FFR Service. On receiving a control signal, the melt furnaces will be turned off within 10 seconds. After 30 minutes, Endeco’s platform will release the control signal and the furnaces can be restarted automatically following the required sequence.
“For peace of mind, we contacted Inductotherm, who came in to check that their equipment would be compatible,” says Mr Brand. “If we don’t have our melting furnaces we might as well close the business, so it was imperative we explored every potential for problems. However, Inductotherm gave us the all clear and we happily moved forwards.”
The installation of the system hardware and software was successfully completed early in 2016 and United Cast Bar went live in February.
“Interestingly, we have not yet had an FFR event,” says Mr Brand. “Clearly, I’m not complaining about this as the scheme dictates that we continue to receive our monthly payments regardless, simply for scheme participation. However, I’ve been made aware that FFR occurs only around five or six times a year on average, which we can live with. If the power is cut on our melt furnaces for 30 minutes we simply lose a few degrees of temperature. It won’t take long to make this up upon restart. In addition, we have a manual override option if for any reason there is a health and safety issue or other concern.” United Cast Bar has already been receiving its monthly FFR payments. As a result, annual revenue is in line with original forecasts set out by Endeco, although Mr Brand says this could rise in line with any increase in production volumes. “There are other benefits too,” he adds. “For instance, Endeco has created a personalised optimisation dashboard that presents data such as energy consumption, which is great for our own energy and asset management plans.”
Lessons & Results
Another important reason for selecting Endeco Technologies was the offer of a futureproof platform. As response schemes are always likely to change over time, participating companies must be technology-ready to access more financially attractive tariffs. The company is the only aggregator able to offer all National Grid DSR schemes, and the company’s advanced platform makes switching easy to facilitate. Indeed, over 100 sites moved from FCDM (Frequency Control by Demand Management) to FFR overnight when latter scheme was released by the National Grid in July 2015.
“It’s still early days but I know Endeco’s team is currently busy generating a usage profile for United Cast Bar, and it may be possible to get even more return from other schemes in the future. It’s good to know we’re in safe hands.” James Brand, Managing Director at United Cast Bar