Cut costs with demand management

The UK is facing a big energy challenge: demand looks set to continue to rise and there are questions over how all this power will be supplied. However, this situation could provide big opportunities for those businesses willing to take simple but innovative steps. The opportunity arises from the need to balance the energy grid. To support this, National Grid will pay organisations which agree in principle to reduce their energy demand at certain times when the grid is under pressure. At these times, some organisations might be able reduce their demand by rescheduling operations or by reducing their use of energy-intensive equipment such as refrigeration units. Alternatively, businesses with on-site generators can choose to self-supply, removing their electricity demand from the grid. Businesses receive payments from National Grid if they agree to be available to reduce their demand in this way. They then receive further payments if called upon by National Grid to reduce their demand. So, companies can help to balance out the grid by reducing their own energy demand at system stress peak times – and generate extra revenue for themselves. Another way National Grid balances the grid is by encouraging major energy users to lower their use during peak periods of energy demand, typically during cold winter evenings when industrial demand coincides with the high domestic tea-time period. National Grid does this by using the three half-hour periods of peak energy demand, known as Triads, to set transmission fees ('transmission network use of system' – TNUoS), which appear as pass-through charges on many major energy users' bills. The amount these businesses are charged depends on how much energy they use during these three half-hour periods. Organisations that have TNUoS on their bill can actively lower their consumption during times when a Triad is predicted, and therefore reduce their TNUoS costs. As Triads are confirmed retrospectively, working out when to lower energy use is the key to successfully reducing costs. You can estimate how much you could save by responding to Triad warnings using our free savings calculator tool at www.npower.com/triad.