Winter is coming, but this year business energy users may be more focused on Game Theory than Game of Thrones.
Triad season begins in November and, for businesses looking to reduce their exposure to high transmission network charges (TNUoS) for the coming year, finalising a Triad avoidance strategy before the season kicks in would be a wise move.
For most consumers, using energy during the peak demand periods (typically 16.00 to 19.00) Monday-Friday is a costlier option throughout the year because of DUoS red band charges, but during winter this period is also when Triads are most likely to occur (as the time of day when demand is highest).
So why does game theory suddenly matter? In the past, businesses have signed up to Triad alerts, triggered by market experts and suppliers who spot the signs of a likely Triad occurring and alert organisations to turn down consumption. By reducing load during the half hourly period in question, businesses have historically been able to minimise their TNUoS charges for that year.
However, with so many businesses now acting on them, Triad alerts can have such a material impact on the levels of demand that the alerted period no longer counts as a Triad. If you don’t act on it, you risk being stung with high consumption. If you do, you could shift the Triad away to another unpredictable period.
Last year’s Triads were perfect examples of their increasingly unpredictable nature. One occurred between 18:00 and 18:30, bucking the trend of the previous 24 Triads that had all occurred between 17:00 and 18:00. On Monday 23 November, a Triad alert was called and so many businesses acted that the registered demand during the half hourly period was lower than that seen on the following Wednesday 25 November , when no alerts had been called. (You can read a full analysis of last year’s Triads here).
National Grid’s winter outlook predicts that security of supply is under control for the coming winter thanks to business flexibility schemes and plants made available under Grid’s contingency balancing reserve scheme. However, unexpected outages or a prolonged period of cold weather could adversely affect the balance of supply and demand, particularly with volumes of gas storage at Rough far lower than in previous years, the closure of coal plants over the course of the year, and increasing wind generation on the system. These factors feed into Triad forecasting and prediction services.
The best way to mitigate the risk of getting caught out by a Triad is to find ways to continually turn down during peak demand periods over the winter period. That could mean a change in production schedules, reviewing when large consuming assets such as heating and air conditioning are scheduled, or switching to on-site generation where available.
From winter 17/18 the Capacity Market will also kick in and a business’ charges will see an additional charge based on consumption during the same peak demand period of 16:00 to 19:00 throughout the winter period (November to February). This will be combined with double digit percentage increases in Triad charges for most consumers.
Finessing a load management strategy ahead of next year will make increasing sense and is also a key driver for the expected surge in sales of energy storage systems, particularly batteries.
Reducing exposure to rising non-commodity costs through more intelligent demand management is a crucial element of any business’ energy strategy. From Triad avoidance to mitigating the impact of the capacity market, finding ways to reduce peak consumption makes good business sense and will only become more important in coming years.
To find out how Inenco can help your business to reduce peak consumption and manage Triads this winter, get in touch. Call us on 08451 46 36 26 or email firstname.lastname@example.org.