Our future in the balance

The first in a series of blogs from Oaktree Power’s CEO, Scott Petersen

To address the climate change challenge, the UK became the first major economy to pass law committing us to reducing all greenhouse gas emissions to net zero by 2050.

Massive changes are already underway to achieve decarbonisation and there has been a corresponding rapid expansion of renewable power generation capability. The UK already has the largest offshore wind generation wind capacity at 12 gigawatts, and this will quadruple by 2030.

So, surely everything is set fair on our journey to net zero? Sadly, not.

With a growing proportion of energy generation coming from wind and solar, there are increasing fluctuations in the renewable energy output each day, as a direct result of changing weather conditions. Already this winter, the UK has had a number of instances when we became perilously close to demand exceeding supply through a combination of factors, but notably that solar and wind production were simply underperforming.

These scares can only become more common as renewables grow to represent a larger proportion of the power generation mix. Of course, installing greater numbers of turbines and solar panels will increase supply to partially address this problem, but however great the investment, it will be to little effect on days when the it’s overcast and the wind is still. So, on the other side of the coin, focus is now turning to ways we might lessen the pressure through addressing the demand for energy.

We are increasingly reliant on renewable energy sources

National Grid has the unenviable challenge of trying to manage this volatility and ensuring that the lights stay on for everyone. Electricity cannot be easily stored and must be produced at the time of demand. Also, it cannot be turned up or down instantly. So, one of the tools National Grid increasingly relies on is “balancing services”, to manage and equalise supply and demand across each half hour trading period of every day.

When National Grid ESO anticipates a shortfall scenario where the UK will not generate enough power to meet national daily needs, they turn to the market for help. The balancing mechanism is one tool deployed, in which they effectively offer to pay users on the grid to either increase supply generation or decrease consumption.

Increased supply can be achieved in a number of ways – from growing banks of battery storage or more commonly from diesel generators. Generators can cover the renewables shortfall but ironically, they are not exactly eco-friendly, producing copious amounts of CO2, even during a short two-hour period supporting the grid.

So, reducing demand appears a much more attractive and sustainable option, but one that is only recently emerging as a viable proposition for many organisations. Controlling demand can be achieved through Demand Side Response, (DSR), and accessing the flexible load of a building or group of buildings, to effectively turn down plant and equipment at critical times. It’s a proven and effective technique used previously only by large-scale energy consumers such as manufacturers, steel and paper mills, food production and distribution centres.

Technology is now making this a possibility for medium-sized organisations. Across the UK, there are literally thousands of under-employed assets in corporate buildings and offices that could be utilised and contributing to this DSR model, reducing stress on national power supply and saving cost and CO2 for the host organisations. We have been missing a trick by not tapping into the huge potential this represents across our towns and cities but until now, smaller organisations felt unable to participate because they were unaware of the possibility and were put off by the technical constraints, regulatory barriers and complex pricing.

Specialist energy companies like OakTree Power are facilitating wider participation in DSR through providing “box-on-the-wall” technology, by removing all the obstacles and offering a simple, commercial model. OakTree Power funds the whole solution, so no budget or capital is needed by the building owner. Organisations don’t need to know what to do, or understand the intricacies of the balancing service, they just need to agree to have sufficient flexible load to participate and work with their DSR company to plan when to engage in the programme. The technology takes care of the rest, so when the demand reduction event is implemented, it doesn’t negatively impact the performance of the building, and none of the occupants will notice any difference.

Acting as an agent, or aggregator for groups of interested organisations in this way, OakTree Power can achieve the threshold for engaging with National Grid and take advantage of the financial and benefits on behalf of all the clients.

Investing in renewables is NOT the sole answer to the climate emergency. We need an integrated approach to meeting our energy needs, one that deals with supply and demand in tandem and to best effect. DSR will have an increasingly important role in helping us attain this balanced approach.

Scott Petersen
CEO, OakTree Power