Energy efficiency case study

Introduction

A warehouse is looking to provide Flexible Services to Electricity North West through a Peak Reduction contract by carrying out energy efficiency measures to reduce their demand, providing additional capacity to help manage network constraints. 

About Flexible Services

When the demand for electricity is greater than the amount that Electricity North West can provide, we procure Flexible Services to alleviate constraints on our network during peak times. These services are provided by companies or individual customers known as Flexibility Providers, who own assets in our region such as generators, battery storage and Electric Vehicle (EV) charge points that can generate more or use less electricity during a pre-agreed service delivery window, and can provide a minimum of 10kW either individually or via an aggregator. This allows us to balance supply and demand, ensuring a safe and reliable supply of energy for our customers and in return for providing extra capacity, flexibility providers receive payment from Electricity North West. 

Delivering a Peak Reduction service via Energy Efficiency measures.

Participants can bid for multiple years of service by installing energy-saving measures. There are a number of energy efficiency measures that the warehouse can implement to reduce their electricity consumption. These include:

     

Lighting: Lighting accounts for between 65% and 95% of energy use in ambient warehousing. There are many simple and inexpensive ways to reduce lighting energy consumption and costs while maintaining adequate light levels:

• Switching to LED lightbulbs: There are two main types of energy efficient light bulbs available in the UK. Compact fluorescent lamps (CFLs) and light emitting diodes (LEDs). CFLs use 60%-80% less energy than traditional incandescent light bulbs but LEDs use 90% less. So while both are cost effective, LEDs are the most energy-efficient option. Originally the cost of LED lighting was comparatively high but prices have come down a lot over the last few years, meaning this option now offers the best value for money. Replacing a single halogen light bulb with an LED of the same brightness will save you up to £2 per year.
• Turning off lighting in unoccupied areas or when sufficient natural daylight is present.
• Utilising occupancy sensors- Lights are automatically turned on when there is somebody there and are turned off after a period of vacancy. Sensors can achieve savings of 30% or more on lighting costs and can be zoned by aisle or area depending on the individual requirements of the warehouse.

Improving insulation: The standard of building insulation and building air-tightness should be prioritised. Spray foam insulation provides effective insulation that seals the roof from the interior. This type of application adheres to virtually any surface at any angle, and is especially effective within the warehouse environment where corrugated roofing is typical. Traditional insulators cannot follow the contours of corrugations - they are therefore complex to install and may create gaps which can result in condensation. The benefits of insulating your warehouse soon add up: you can enjoy greater temperature control and its associated energy savings; a warmer environment in the winter and a cooler one when the temperatures rise outside and the complete foam seal fills any gaps, eliminating draughts and leaks.

Installing solar photovoltaic (PV) panels: Solar PVs generate electricity by absorbing sunlight with PV cells in the panel.. Solar panels can still work on cloudy days, but not always at their peak performance. With large available expanses of roof area, warehouses are an ideal location to install PV solutions. As warehouses are energy-intensive buildings, installing a solar PV system on the roof provides a secure and reliable source of renewable energy that can be used to generate electricity for the entire building, reducing electricity demands from the network. It also reduces the businesses carbon footprint and provides extra revenue when used to generate electricity for the purpose of providing Flexible Services to the network (under a Operational Utilisation & Variable Availability or Operation Utilisation (generation turn up) product). 

Pre-tender

Our tenders are published on the ElectronConnect and Piclo Max platforms twice a year in Spring and Autumn in line with our Network Development Plan (NDP) and Distribution Future Electricity Scenarios (DFES) publications to reflect our latest network requirements. To be notified of our upcoming tenders, the farmer signs up to our flexibility mailing list.   

Prior to the launch of the tender, the warehouse:

• Registers the company onto either ElectronConnect or Piclo Max (whichever platform they prefer) to pre-qualify to participate. The information submitted such as credit checks and insurance details are assessed by Electricity North West and once approved, the company's commercial qualification remains valid for future tender rounds
• Electricity North West utilises the framework style Standard Flexibility Services Agreement developed by the Energy  Networks Association Open Networks Project. The farmer can sign up to the general T&Cs of this agreement as part of commercial qualification, and a signed copy must be returned via Electron or Piclo prior to placing a bid.
• Registers their asset(s) onto their preferred platform.

Tender process 

Pre- Qualification

Once the Invitation to Tender (TT) has been published, the warehouse reviews the requirements using the interactive map on the platform and upon establishing that their warehouse is located within a requirement zone seeking a Peak Reduction service, they calculate how much of the required demand response it can offer, when, and at what price. Prior to submitting a bid, the warehouse uses the cost calculator tool on our website to check that the prices they are prepared to offer for availability and utilisation don't exceed the ceiling price that we are offering for the service as part of this tender round. The cost calculator can be found within the ITT appendices. At this point, the warehouse has decided they would like to participate in the tender.

Their next step is to complete technical qualification on their chosen platform by confirming the assets they wish to put forward in the competition. Electricity North West then assess the technical details of the participating assets and the capability for delivery. If the warehouse is unable to provide 10kW of flexible capacity, it can still take part via an aggregator- aggregators such as electricity suppliers, combine load from multiple customers to provide flexible services. The warehouse is notified via ElectronConnect that their assets meet the requirements of this tender, allowing them to move to the bidding stage of the process. 

Submitting a bid

For the final stage of the procurement process, the warehouse submits a bid to the tender via their chosen platform. This is carried out by linking the pre-registered assets to the Peak Reduction payments, as well as the periods where the warehouse can commit to reduce their demand peaks. Once the bidding window has closed, Electricity North West assesses the tender responses before accepting or rejecting bids based on the proposed payment and the asset's ability to meet the specification. If the warehouse's bids are successful, they will then enter into a Flexible Services Agreement with Electricity North West to deliver the Peak Reduction service within the required service windows.