UrbanWind today reported a sharp increase in companies enquiring about on-site power generation, following National Grid’s warning yesterday.
It said growing numbers of British businesses were now looking to move towards ‘energy independence’ to protect themselves from the rising threat of future brownouts.
UrbanWind CEO Paul McCullagh revealed it had seen close to a 20% increase in enquiries as a result of the announcement about tightening margins in generating capacity.
He said that companies were increasingly looking at ways to protect themselves against possible interruptions in supply at times of peak demand.
He predicted it would lead to changing work patterns for employees in all industries, as businesses bring their risk and energy costs down by working at ‘off peak’ times.
Paul McCullagh also pointed out that energy suppliers will increasingly offer discounts for companies that have the capacity and ability to reduce their demand when asked to – something that was commonplace in the 1980s.
Tackling the growing problem has moved higher up the agenda in Britain’s boardrooms. UrbanWind says procurement, energy efficiency and demand-side measures, such as altering the time of peak demand, or reducing reliance on grid-powered generation, are becoming increasingly important.
It said high-profile firms now have real ambitions to become 100 per cent reliable on renewable energy technology in the second half
of the decade, with wind power, solar PV and combined heat and power leading the way.
UrbanWind’s comments follow National Grid announcing yesterday in its 2014/15 Winter Outlook report that capacity to generate power this winter will be at a seven-year low, after a string of closures and breakdowns at UK power stations.
This has brought into sharp focus the so-called ‘energy trilemma’ facing UK businesses of volatile prices, security of supply and demanding environmental targets.
Paul McCullagh continued: “Following National Grid’s latest outlook update, security of supply and keeping the lights on is now on everyone’s radar. Britain has the fourth best security of supply in the world today, but the question is: for how much longer?
“Demand-side measures are also becoming more critical to businesses, as they look towards ‘enlightened self-interest’ when it comes to their energy challenges.
“It includes switching off the power, switching energy-intensive work to cheaper off-peak times, combined with introducing more energy efficiency measures, on-site power generation - including solar and wind - and energy capture and storage for future release at expensive times.
“Companies are looking to see how they can best harness renewable technologies on-site, for example, creating electricity from wind power and storing it in batteries to use when needed.
“We are also seeing an increase in organisations and businesses using their back-up generation to allow them to opt-out of the national grid at expensive times in return for rebates and subsidies from the big energy suppliers. This trend will undoubtedly grow to become the norm, as it was in the 1980s.
“Proactive energy management strategies include a growing approach to embedded generation, fully meshed with in-house procurement that looks to give the company the best deals possible.
“We don’t believe that companies will totally opt out of the national grid, as they seek greater energy independence.
“Instead they will look to use renewable energy as a tool towards supply security, capping bills and reducing their carbon footprint.”
UrbanWind is also forecasting that energy supply firms will introduce new and punitive premium rates for peak demand – which has traditionally been 4pm-7pm Monday to Friday from November to March. The measures will be needed to try to reduce the growing pressure of peak demand on the grid network.
Contingency measures could also be adopted, such as paying factories to shut down for periods of peak demand and supplying additional reserves from moth-balled power stations.
Paul McCullagh said: “There is no doubt the ‘energy trilemma’ will become one of the major issues facing the Government and businesses over the next decade.
“Again, we see that the need for investment in energy projects to keep the lights on is also proving to be something that politicians of all parties continue to struggle with.”