Lucrative power balancing schemes offered by National Grid and EirGrid can provide the milling and grain industry with long-term revenues of up to £90,000 per megawatt. These demand side response schemes involve energy-intensive businesses reducing power consumption for short periods to stabilize the electricity grid. Aggregators help coordinate multiple businesses to form a virtual power plant and ensure adequate response to requests from grid operators, earning significant income without capital costs for participating mills.

1. M
any in the milling and grain
sector may be unaware that
there is a significant new
revenue stream available to
progressive and forward-
thinking mills. It focuses
on the use of energy, and
how by turning the power
down for a relatively short
period each year in line with National Grid’s and EirGrid’s
requirements, companies can enjoy considerable and long-term
financial rewards.
High Energy Consumption
The milling and grain industry is by its very nature an intensive
user of energy. In flour mills, energy-using equipment as
such roller mills, purifiers, sifters, fans and conditioning kit is
commonplace. The equipment found in animal feed mills – such
as pellet presses, steam boilers, grinders and fans is equally as
energy-intensive.
Unfortunately this level of intensive energy use across industry
represents a problem in the power sector, where only the most
oblivious will be unaware that there exists a somewhat precarious
electricity supply situation. According to a Guardian newspaper
report earlier in 2016, UK electricity demand is expected to
outstrip supply by over 40% within 10 years.
Financial opportunities for energy-intensive businesses
Many thought renewables would deliver the answer, but
in reality the inflexibility of renewable energy sources in
conjunction with the difficulty of controlling grid stability in real-
time, represents a major challenge for grid operators. In simple
terms, when generation and energy demand are imbalanced, a
change of frequency in the grid system occurs, which is made
worse by the intermittent nature of wind and solar sources.
The requirement for quicker grid balancing and frequency is
why the system operators (National Grid (in the UK) and EirGrid
and SONI in Ireland) now offer a number of opportunities for
energy-intensive businesses, with very lucrative rewards for those
able to offer real-time response.
Ofgem, the industry regulator, is also on-board, recently laying
out five priority areas of focus, central to which is a pledge to
make the UK energy system more flexible. With this in mind,
Ofgem is actively encouraging businesses to engage in demand-
side response.
Demand-side response
Firm frequency response (FFR) and the new Dynamic FFR, as
well as the forthcoming (2017) Enhanced FFR, are schemes that
all form part of the system operators’ broad DSR (Demand Side
Response) suite of solutions. In essence, these schemes involve
removing sufficient load from the grid to stabilise frequency.
To help boost uptake, the National Grid and EirGrid are offering
those that participate the potential to earn extra income from
assets by adjusting power consumption in real-time. As a result,
grid operators can reduce the requirement for coal and gas-fired
reserves to be ready to supply power at short notice.
Earn up to £90,000 per megawatt
This is where the milling and grain industry can accrue
significant financial rewards. To provide an indication, in the
UK sums of up to £90,000 are currently achievable for every
megawatt (MW) of average onsite energy consumption turn
down. In Ireland, the latest scheme – DS3 System Services – also
offers very significant sums per megawatt.
Any mill expecting to endure weeks if not months of blackouts
to see financial savings on such levels would be wrong. In the
first instance, the requirement is for ‘turn-down’ not ‘turn-off’,
and secondly, the sums stated are in return for around 10 (on
average) ‘turn-down’ events per year, lasting for a maximum
of just 30 minutes each. In total, this adds up to – on average -
around 5 hours a year.
For those thinking there must be a catch, there isn’t. The grid
operators are prepared to pay such high rewards as it is obliged
to control frequency within the limits specified in the ‘Electricity
Supply Regulations’, i.e. ±1% of nominal system frequency
(50.00Hz) except in abnormal or exceptional circumstances. It
must therefore ensure that sufficient generation and/or demand
is reserved in automatic readiness to manage all credible
eventualities that might produce frequency variations.
Virtual power plant
As every milling and grain facility will have its own array
of assets and requirements, comprehending and choosing the
Lucrative ‘power balancing’
schemes can help the milling
and grain industry unlock
long-term revenues of £90,000
per Megawatt from National
Grid or EirGrid
by Michael Phelan, CEO at National Grid and EirGrid
Aggregator, Endeco Technologies
THE BALANCE OF POWER
52 | October 2016 - Milling and Grain
F

3. optimum DSR scheme is vital. With this in mind, partner companies
known as aggregators provide the critical elements that enable
participating companies to make the best selection and optimise returns.
Aggregators take a central role in this new power-balancing arena. In
essence, they act as intermediaries between the Grid operators and large
energy users. They create a ‘virtual power plant’ where the assets of
hundreds of companies are aggregated. This provides a grid-balancing
mechanism helps the system operators to deliver on their vision for a
more sustainable, flexible power infrastructure.
All of this combines to help National Grid (UK) and EirGrid (Ireland)
to minimise the operational costs of making the grid ‘smart’ because
the aggregators deliver a technical solution to the challenge of grid
balancing.
Essential partnership
From the point of view of the end user, an aggregator – such as Endeco
Technologies - is an essential partner for any feed or grain mill that
wishes to take advantage of the long-term lucrative opportunities. They
take care of the necessary hardware and software installation, as well as
the online monitoring and reaction systems, and the day-to-day running
of the system.
All of this is offered without any capex requirement, with the
aggregator instead taking a percentage of the scheme pay-out. As a point
of note, the aforementioned sum per megawatt is the amount payable
after the aggregator has taken payment.
Participating companies are in prime position to benefit from this
offer. In this first instance, energy consumption is reduced on selected
equipment after an audit of the plant, before energy strategies to reduce
cost are adapted and agreed with the plant’s operations team.
The chosen aggregator will connect the manufacturer’s principal
assets to its proprietary on-site optimisation platform, which enables the
automated control of energy consumption via wireless smart sensors and
actuators. One part of the aggregator’s job is to ensure mills are ready
and able to turn down their energy use when the grid operators require
it, and check that the response works correctly. Facilities employing an
aggregator simply relax and concentrate on day-to-day business.
Aggregate to accumulate
The answer to the question of which aggregator is best depends on
many factors. However, companies should be mindful to only work with
one that has a solid portfolio of successful existing sites under its belt.
A further vital factor is to choose an aggregator, such as Endeco
Technologies that offers a technology platform that can future-proof
against better schemes being introduced.
Response schemes are always likely to change over time and plants
participating in the scheme must be technology-ready to access more
financially attractive tariffs.
Ultimately, DSR schemes represent a no-risk route to generous
additional income for mills willing to help the UK better manage its
challenging electricity requirements.
HOWTOEARNMONEYFROMYOUR
ENERGY-USINGASSETS
IDENTIFY:An approved National Grid or EirGrid
aggregator will assess your available assets and calculate
revenue potential:
In flourmills, assets are likely to include: roller mills, purifiers,
sifters, fans and conditioning kit.
In animal feed mills, assets may include: pellet presses, steam
boilers, grinders and fans.
DEFINE:Your aggregator will work with you to establish
parameters for response (including generator / battery back-
up), define constraints and operational priorities. This ensures
that there will be no impact on your operations and processes
as a result of turn-down.
IMPLEMENTATION:Your aggregator will install and
configure its technology platform to connect your energy
intensive assets with no capital outlay *.
RESPOND:Once you’re connected, you’re ready to
respond when required, without risk or impact on your
productivity.
EARN:You start receiving monthly payments from the Grid
Operators within one month.
*Endeco Technologies doesn’t ask for any capital outlay
for the implementation of the technology platform. Other
aggregators might take a different approach.
More information:
www.endeco-technologies.com
Or drop us line:
sales@endeco-technologies.com
callback@endeco-technologies.com
54 | October 2016 - Milling and Grain
F

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