Costain develops new demand response solutions

Engineering solutions provider Costain works on some of UK’s most demanding infrastructure projects, including the capital’s ambitious Crossrail programme. In 2014 it launched the COdemand venture to help customers tap into the potential of the demand side. As Sustainable Solutions Advisor Christopher Hills explains, it represents a growing opportunity.

Whether we are delivering a complex rail infrastructure project or managing assets for our customers in the water sector, energy security is a big issue.

With around 15% of the UK’s total electricity demand met through grid balancing at present there is a clear opportunity for demand response to provide a cheaper and cleaner solution. At the same time lots of businesses are unaware that they could harness their existing assets more effectively.

Short Term Operating Reserve (STOR) represents a total of about 2GW of reserve (or backup energy) that can be called on at short notice if there is a sudden loss of power anywhere on the system.

It’s a relatively new area for Costain, but already we’re seeing a lot of interest and that’s why we established COdemand– a portfolio of solutions in this arena – as a way of helping customers get smarter about how they manage their energy loads.

Partnerships in place

To combine our own sector knowledge with wider demand side expertise we created two partnerships. The first is with Open Energi to offer their Dynamic Demand solution that fine tunes organisations’ power consumption and gives more flexibility to manage the electricity network. We have since expanded the portfolio through a second agreement with Flexitricity to offer Frontline (Frequency Control by Demand Management), STOR (Short Term Operating Reserve), Footroom (Negative Reserve) and the Capacity Market.

To date we are working with customers in two specific sectors – water and rail – although there are very clear applications for demand response technology in other areas of our work, including oil and gas, highways and the power sector.

Our teams are often working side-by-side with customers at their sites and so have first-hand knowledge of how assets might be used more efficiently. Applicable assets include heating, ventilation and air conditioning (HVAC) systems; boilers, pumps, fans, UPSs and back-up generators. Some of our customers also operate combined heat and power (CHP) plants.

Scale isn’t everything

One of the myths about demand response is that it is only relevant to the very largest businesses with manufacturing plants spread across multiple sites. We’re saying to customers: “This is something that every company can play a part in.”

As an example we are employing Dynamic Demand technology at our own head office in Maidenhead. Dynamic Demand linked to the HVAC system at Costain House and is operating 365 days a year, allowing corrective action to be taken in response to changes in grid frequency.

One of the other benefits of the technology is that it provides a second-by-second analysis of electricity use so that energy efficiencies can be identified, potentially cutting energy costs and reducing CO2 output.

One of the myths about demand response is that it is only relevant to the very largest businesses.

Towards Smarter Cities

Taking a longer-term perspective, there is plenty of debate about creating Smart Cities and how technology can drive society towards improved sustainability. Certainly we believe that demand response has a part to play.

When we introduce customers to the idea we sometimes talk about the concept of constructing a virtual power station – one built to run ultra-efficiently and provide electricity exactly when needed. When set against the cost, environmental impact and time needed to build entirely new power stations, the benefits of demand response are clear.

So, where next? While industry accounts for a significant slice of UK energy consumption, (about 16% in 2013), domestic consumption stands at around 29%, so to realise the full potential of demand response the way we use energy at home is the next big opportunity. The advent of smart meters offers a glimpse of what is possible, but unlocking the full potential of the domestic market still has a long way to go.

From megawatts to negawatts

As interest continues to grow in Demand Side Response (DSR), more and more businesses are exploring the opportunities that exist in turning down their power demand at peak times. One business that is helping its clients take maximum advantage is Incentive Carbon Management. Board Director Bill Pollard explains.

At Incentive Carbon Management (ICM) we provide energy and carbon reduction solutions to both SMEs and larger businesses. We’re part of one of the UK’s leading independent facilities management groups, Incentive FM Group.

The services we provide help our customers save a minimum of 20 per cent from their carbon and energy costs, while ensuring they meet current legislation and their corporate social responsibility (CSR) objectives.

Understanding our markets

We operate in an extremely complex market and it’s important to us that we become an integral part of our customers’ energy management teams. It’s our responsibility to bring innovation and new ideas to the table. We’ve found that most of our customers have some level of knowledge and awareness of DSR, but they’re uncertain how best to implement it.

Interestingly, when discussing it with customers, more and more of them want to know about turn-down services, where they receive payment for reducing their power demand temporarily at peak times. I also sense that businesses are becoming greener. They have an appetite to further reduce their carbon footprints, while maximising the financial incentives available to them from the balancing services offered by National Grid.

They want to do more than just switch on their generation assets. But, at the same time, they want to be sure that there’s no risk involved in taking the turn-down route.

How we support them

We’ve recognised the importance of DSR for some time now, both at a national level and for our customers. So we’ve been working with aggregator Pearlstone Energy to educate ourselves and our customers on all the opportunities available.

The services we provide help our customers save a minimum of 20 per cent from their carbon and energy costs, while ensuring they meet current legislation and their corporate social responsibility (CSR) objectives.

As a leading provider of demand management, Pearlstone Energy can design and put in place a range of DSR services for our customers. This allows us to add value to our existing customer relationships, deliver fresh ideas, cost savings and exciting new revenue streams. The solutions we’re able to offer through Pearlstone Energy also enable our clients to participate in DSR in a carbon neutral way – and to view their energy use in real-time across their facilities.

This is thanks to Pearlstone’s partnership with technology experts Honeywell, which means we’re able to use the company’s pioneering Automated Demand Response (ADR) technology. This allows electricity consumers to switch off or turn down non-essential electricity in a reliable, fast, cost-effective and automated way.

It means our customers are helping National Grid balance the network by providing ‘negawatts’ rather than megawatts. By reducing demand, rather than switching on diesel or gas generators, they deliver flexibility in a greener, zero-carbon way.

And the benefits to our clients don’t end there. It requires zero investment from them, reduces their energy consumption and brings in up to £50k/MW a year in payment for providing these services.

New revenue stream

For many of our clients, this creates a new revenue stream. It enables them to sell the energy they don’t need at certain times, for short periods, which they wouldn’t otherwise be able to sell on their own.

Over a five-year contract period, on current estimates, the three clients that we’re working with on this will reduce their energy costs by more than £1,000,000. Our aggregator’s ADR technology will manage their electricity demand, significantly reducing their energy bills and potentially reducing their network demand charges.

Expanding our service

We see DSR as a valuable and positive development for our customers – and also for us as a business. As well as being an important stakeholder for future sustainable development and helping National Grid by providing flexibility, it enables us to tailor the services we offer and secure long-term profitable relationships with our customers.