Request a callback
  • Our experts process over 93,000 invoices per month and we've recovered over £11m in over-charges for our clients in the last year
  • We provide support to over 500 businesses for energy and carbon management
  • Our solutions team have identified savings of £37.5m per annum for our clients, a total of 495,338,992 kWh savings identified
  • Last year we saved our CCA clients alone £25.5m

Summer outlook: demand reduced by distributed generation

National Grid has released its Summer Outlook report for 2018, and it seems that the growth in renewable and distributed generation will be key factors in pushing down demand this summer.

The unpredictable nature of renewable generation, coupled with the inability of the grid to accurately predict the capacity of distributed generation, present a challenge to the Grid when it comes to balancing supply and demand. However, the operator is confident that it has the tools it needs to successfully manage the grid throughout summer 2018.

A downturn in demand

Demand for both gas and electricity is expected to be low this summer, with peak transmission system demand for high summer forecast at 33.7GW. The minimum summer demand is also set to fall to 17GW, which is 600MW lower than last year.

National Grid have predicted that gas supply and demand patterns will be largely similar to last year, with demand around 30% lower than the winter peak. The total UK gas demand for the summer is expected to be around 35.7 billion cubic metres, which is slightly lower than last summer, but the Grid is also expecting one of the highest volumes of maintenance of the gas transmission system to date over the summer.

Our changing energy system

The predicted fall in summer demand can largely be attributed to our evolving energy system; the way we use and generate energy is fundamentally changing.

Renewable generation is accounting for a steadily increasing percentage of demand. Last year we saw the first coal free day in Britain since the industrial revolution on 22nd April 2017, and we’ve already surpassed this record in 2018, as no coal was used to generate electricity in a 55-hour period between 17th April and 19th April 2018. The heatwave we experienced last week boosted solar generation in particular, with solar accounting for around 20% of our electricity on 21st April. While it’s encouraging to see that we’re making positive progress towards a low carbon economy, moving away from fossil fuels and becoming increasingly reliant on renewables does make it more difficult for National Grid to balance supply and demand.

The proliferation of distributed connected generation, from wind farms to solar panels, is also challenging for the Grid. As distributed generation (DG) is connected to a distribution network rather than the transmission system, National Grid has a lack of visibility over DG, and they only see it as reduced demand. This presents an ongoing challenge, as by 2030, the Grid expects that 50% of all electricity generation will be connected at a local distribution level.

Distribution Network Operators (DNOs) are currently developing strategies to transition to Distribution System Operators (DSOs), which will require them to work more closely with embedded generators and develop smart grids. This may lead to DSOs having greater responsibility for self-balancing networks. Most DNOs produced outline statements of the transition process in late 2017 and we will keep you informed of progress and tell you what this may mean for your business.

Finding flexibility  

Despite the challenges facing the National Grid this summer, they have stated that they have the tools they need to ensure the grid remains balanced.

They have already warned ‘inflexible generators’ – such as nuclear, CHP, wind and hydro facilities –  that it’s likely they will be called on to reduce their output in order to balance the system. It’s also possible that pumped storage facilities will be asked to carry out pumping activities during the day time, rather than just night, and businesses could be called on to increase their demand in order to avoid excess supply.

This year will also be the first year that National Grid has battery storage capacity at its disposal, as it procured 200MW through the Enhanced Frequency Response mechanism. The Grid also expects to temporarily mothball some of the UK’s coal power stations over the summer, as the increase in solar and wind generation is likely to push down wholesale prices and render them uneconomical.

Be ready to benefit

As the weather gets warmer, businesses that can afford to be flexible could benefit from participating in demand side response activity to help National Grid balance supply and demand throughout the summer. To ensure your business is ready to benefit, speak to one of Inenco’s optimisation experts today.