High street retailer M&S tailor-made for DSR

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.

Making connections

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.

What’s next?

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.

Sainsbury’s targets 130MW of demand response

Supermarket giant Sainsbury’s is aiming to unlock the demand side potential in a network of 400 stand-by generators located around the UK.

Keeping the energy bill for Sainsbury’s in check is a major undertaking. It’s a challenge that we’re taking seriously and in recent years we’ve invested in more than 100 biomass boilers, 40MW of solar PV, introduced LED lighting, 27 Ground Source Heat Pumps and Green Gas CHP. As a result our absolute energy consumption today is lower than it was in 2005-06, despite opening 52% more space in that period.

So, we’ve made a good start, but we have only really scratched the surface in terms of what we could do through demand side response. The opportunity is huge because our business accounts for something like 0.6% of all electricity consumption in the UK.

Investigating the role of on-site generation

In the event of a power cut each of our sites has a back-up generator set in place, which starts up if the site comes off the grid for any reason. These generators produce enough power to enable each facility to function for a period of time and to get people out of the building safely. What we do know is that we have approximately 130MW of generation capability that could be put to use providing demand response. However, the hurdle we need to overcome is the complexity of getting those generators connected to the grid.

Sainsbury’s has approximately 130MW of generation capability that could be put to use providing demand response.

Negotiating connection

The process of connecting new on-site generation is complex and time-consuming. It’s also not set up to deal effectively with a situation like ours with 400 individual sites, each needing to be assessed as a separate entity.

At present we need to apply for each potential connection to one of the 14 Distribution Network Operators (DNOs) and the time between submitting an application and receiving a ‘yes or no’ decision is between 45 and 90 days.

In addition, because our generator sets are used as back-up currently, they are not connected directly to the grid. This necessitates a significant amount of investigative work to provide the necessary technical specifications and data to the DNO. We estimate that the cost of completing the application process for 350 sites would run to millions of pounds.

There is no easy answer because the DNO needs to be sure that any connection does not cause a problem on the local grid. It would certainly encourage businesses like ours if there was a process to validate potential connections en masse. We would also welcome a centralised fee with each DNO to provide clarity on costs.

It’s unlikely that all 400 of our sites will be suitable for connection, but certainly we think 250-300 is a realistic figure.

We have only really scratched the surface in terms of what we could do through demand side response.

Going live

We’ve reached an exciting point in the development of our demand response capability with the first 150kW generator set in Dewsbury, West Yorkshire going live this month. This will be followed by a 1.2MW generator at our Tamworth depot in Staffordshire, so we will be able to assess the success of both small and large scale options.

At the same time we’re looking at other technologies. For example, later this year we will launch a trial of battery storage at our Melton Mowbray store, which aims to store up off peak electricity to be released on demand. We want to prove the principle before assessing a wider roll-out.

In addition, we’re working with Open Energi, using their expertise in frequency response to examine what else we can do across Sainsbury’s to reduce our energy consumption.

I think the message is that, as part of Sainsbury’s 20×20 Sustainability Plan, demand response technology has a part to play. We have 130MW of generation just waiting to be used. It’s now about working with the energy industry to make it happen!

Co-operation that counts

We have over 130 food stores, from small convenience shops to supermarkets, our own distribution centre at Ipswich and a head office just outside Ipswich, at Wherstead. Our operations stretch from King’s Lynn in Norfolk down to Burnham-on-Crouch in Essex, including a major presence around Colchester, Ipswich and Norwich.

Going back quite a number of years I was aware of Dynamic Demand, the technology Open Energi had developed. I’m an engineer, so I was looking at what Open Energi  were doing from an engineering point of view and it made enormous sense. Responding to the National Grid frequency to turn electrical equipment on or off where spare capacity exists to achieve load shifting was a simple but effective idea.

Speedy response

When National Grid has a period of stress, we are required to respond within two seconds and deliver within 10, so we arevery fast. One of the base loads we have is a 600kw electric boiler at our head office, which can be turned off almost instantly.

National Grid knows that, at the end of Eastenders for example, thousands of kettles will be switched on and toilets will be flushed. To help cope with the additional electricity demand National Grid can call on hydro-electric (pumped storage) stations, but they also have to run up extra power stations, ready to meet that demand, which might only last for three to five minutes.

If the East of England Co-op, and lots of businesses like us, are available to turn loads off, National Grid can avoid calling upon their reserve capacity power stations which can take up to four hours to run up (and a further four hours to run back down again). Likewise, if National Grid has an excess of electricity – for example, if a steelworks goes off-line unplanned – we can turn our heating on so we’re using up the spare capacity.

It all adds up

There are two solid benefits to Demand Side Response. Instead of paying power stations for spare availability to supply, National Grid can pay us to turn off equipment. We’re a virtual power station. Combine ourselves with others doing the same that adds up to a lot of energy and at a cheaper price than a power station. It also reduces UK carbon emissions by providing a clean and efficient alternative to peaking power stations.

From our point of view, it’s a useful financial income stream and we hope it’s going to generate more income as time goes on.

From our point of view, it’s a useful financial income stream and we hope it’s going to generate more income as time goes on. This is because stable power generation methods such as coal or gas are increasingly being supplemented and replaced by solar or wind power, which are subject to unpredictable peaks and troughs in power generation.

Dynamic Demand rapidly fills the power generation gap created by fluctuations in renewable energy production. That speed of response is able to provide a useful service to National Grid and an income to the East of England Co-op.