Just when you thought it was safe to relax about Energy

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

Did you hear about the crisis that hit the UK on 4th  November, causing  massive disruption, and provoking outcry in industry, and suddenly sent energy rocketing back up the UK’s political agenda?

You probably didn’t hear this, because the first major threat to the UK’s national grid this winter still left it with a princely 2% spare capacity, sufficient for the National Grid to issue a “notification of inadequate system margin” (NISM), but insufficient to actually disrupt the service.

While this was only the first stage of alert, and while an abnormal lack of wind was an aggravating factor – bringing the UK’s now significant wind generation capacity almost to a halt, one of the mildest starts to November on record may have helped to save the day. As so often in human affairs, a “near miss” is treated as a near non-event. A single “hit” on the other hand could have major repercussions, prompting much more urgent action not just on the resilience of the UK’s national grid, but on how buildings respond to peaks and troughs in energy demand.

BSRIA has been reporting and analysing on Building Energy Management and the issues around it for a number of years now. One of the trends that we have noticed is that over time, more suppliers of building energy management solutions include some form of Demand Response as part of their solution. This enables a temporary reduction in the power drawn by certain services in the building where this does not impact on productivity or well-being.

Our latest review of the global leaders in Building Energy Management showed that almost half now offer demand response, the highest figure that we have seen to date. This includes both the global leaders in Building Automation and Energy Management and suppliers specialising in energy management.

At the same time, energy storage is being taken more serious as a viable and cost-effective way of providing additional resilience and peak capacity, both for energy suppliers and in some cases for consumers. While the UK is still some way from having a thriving market in home energy storage systems comparable to that developing in Germany (where residential electricity is significantly more expensive), it seems quite likely that any significant grid outages will give a boost to the market for battery storage for both residential and non-residential use.

It is still quite hard to judge how probable a major power outage is in the UK this winter. There are already further processes for demand reduction which can be invoked if the situation gets tighter than it did on November 4th. However a coincidence of severe cold with a lack of wind, and unplanned outages at power stations is not inconceivable. And the major strategic initiatives, such as the construction of two new nuclear power plants, will take years to come online.

The UK has got used to ‘living dangerously, and so far has got away with it. But the sensible response to a lucky escape is to learn the lessons, and  not to assume that your luck will go on holding indefinitely.

The very least we can say is that all organisations should be looking at the potential implications of even a short interruption to power supplies, and how they can best mitigate these.

I shall be talking a bit more about BSRIA’s latest research into building energy management and related areas in a webinar on Tuesday 24th November, so I hope that you will be able to join me then

When will the lights go out?

In the UK and some other countries the maximum demand on our supply network is perilously close to the supply capacity. In the UK we have a total supply capacity of 80 Gigawatts, and only around 67GW is available at any one time according to OFGEM director-general Alistair Buchanan. The maximum demand last winter was 60.5GW and the peak summer demand isn’t much less. It would only take a prolonged cold spell or a power station failure to drop the supply capacity below our maximum demand.

What this means in practice to an individual customer is that there is an increased risk of outages or voltage dips. It has been predicted that this could be a one in twelve chance of losing power in a year for any customer by 2015 and an increasing risk until either the supply capacity is increased or demand is cut. In the UK we are closing our coal fired power stations, decommissioning our old nuclear stations and not building new capacity fast enough to replace them. Read more about this in The Spectator.

Last week OFGEM published electricity supply and demand forecasts, showing that spare capacity has fallen as more gas-fired plants have been mothballed. It reiterated warnings that even if blackouts are avoided, power prices will rise steeply.  With the UK generation capacity margin likely to drop to 2% by 2015 the competition for supplies is likely to push prices up by 20%. Read more in The Telegraph.

Graph taken from Bill Wright's presentation given at BSRIA Workshop

Graph taken from Bill Wright’s presentation given at BSRIA Workshop

The profile of generation capacity over the next ten years is affected by political decisions such as closure of coal-fired power stations, extending the life of old nuclear stations, availability of imported gas, introduction of fracking for shale gas and planning permission for renewable energy.

Businesses need to prepare for the increased risk to protect their business continuity. At a recent BSRIA workshop, business leaders talked about how they could respond to the risks and the knock-on effects of power outages.

There are two main approaches:

  • reducing demand, including demand side management
  • adapting to a less reliable power supply with standby power.

But the effects of power outage on security of supplies, transport and even public order and crime need to be considered.  The process of planning for outages and continuity of power is part of a more general process of Business Continuity Management, for which there is a British Standard Code of Practice, BS25999.  This Standard covers all the threats to business continuity, but with the risk of power loss to a business and its supply chain and the effects of power loss on staff, customers and the public there may be a need to re-assess the risks and amend the business continuity plan.

OFGEM are hosting a Working Group to develop solutions to network capacity problems using the Low Carbon Networks Fund.  Their recent seminar presented the results of commercial and domestic demonstration projects.  The domestic demand peaks at nearly double the daytime demand between 4pm and 8pm on weekdays.  The early part of this peak coincides with the last hour of the working day so commercial demand is also high.  Various approaches to demand management are being trialled in different areas of the UK including incentives and variable pricing.

There are incentives for customers agreeing to cut their demand when local supply nears capacity.  These are set up locally with different priorities, such as the Thames Valley Vision which utilises Automated Demand Response and Business Consumer Consortia along with energy storage to reduce peak demands and avoid the need for supply network reinforcement.

In summary, the UK electricity supply network is expected to become less reliable and this will affect consumers as soon as 2015.  If consumers don’t do something they are likely to be hit by power cuts more often.  Solutions include planning for power failures, checking the reliability of standby systems, negotiating demand reduction facilities or permanently reducing demand.

BSRIA is keen to work with building operators, manufacturers, network operators, consultants and anyone involved in power continuity management.

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