Optimize the value of your load-shedding capacity06 Mar 2023
“What is the demand response value of my electricity consumption? “. This is a question that our customers ask us more and more often. Reinforced by soaring energy prices, demand response and flexibility markets, hitherto quite niche, are expanding rapidly. Explanations.
Understanding the load shedding market
To understand what load shedding is, remember that within an electrical network, a permanent balance must be maintained between the production of electricity and its consumption.
Electricity production may be insufficient due to a variety of factors, such as consumption peaks, for example in extreme weather conditions, a drop in renewable or nuclear production, or even disruptions of gas supply (for gas-fired power plants). This is exactly the situation we feared for this winter, and this is why electricity markets need flexibility to operate efficiently.
In the event of insufficient production, the network operator may be required, as a last resort, to take load shedding measures, i.e. to cut off electricity from time to time to certain consumers, to restore the balance between offer and demand.
To avoid this, the network operator has set up demand response programs which consist of offering a company to voluntarily reduce its electricity consumption during certain periods. This is called Voluntary Load Shedding. In return, the company receives financial compensations and reduce its energy bill.
The expansion of the demand response market
With the problems of security and energy supply caused by the war in Ukraine in the short term, but also in the medium term with the rise of intermittent renewable energies, maintaining grid balance becomes an increasingly difficult job. This is why operators now need the participation of more and more players capable of suppressing part of their power consumption. Financial incentives complement this need.
Sebastien Ugona, co-founder of Blue Pearl Energy, explains: “Until now in the industry, the process, the operation had always prevailed. Guaranteeing or protecting its production was not worth the few thousand euros gained from demand response programs. But now that energy prices have been multiplied by 10, the economic trade-off is more complex. In 2023, companies will start paying their real energy bills and will have no choice but to maximize the share of production (and therefore their consumption) during off-peak hours”.
Load shedding also leads to a reflection on sobriety and consumption. When you make a change in the operating mode of your installation, you can lower your energy bill. Companies are thus beginning to integrate the energy variable into their production strategy. They become aware that they have an interest in acting on the “modulation of consumption”, in other words, on the way they operate their energy installations.
While load shedding is not an unknown concept among industrial companies, it is now also expanding among service sector players who weren’t used to think about it before. For a tertiary player occupying thousands of square meters of office space, the financial stakes connected to load shedding are beginning to be significant.
Blue Pearl Energy can help its industrial and tertiary customers to qualify their load shedding capacities and market them to the network operator. Assessing your load shedding capacity means being able to anticipate the non-essential or non-optimal consumption of your facility. This involves, for example, cutting off the air conditioning or heating at certain times of the day, taking advantage of the inertia of the buildings. You can also anticipate by heating the building at off-peak hours, such as at the end of the night, before the employees arrive, to then be able to clear during rush hour.
You need help identifying your load shedding capacities, and evaluating the added value they can represent over time? Blue Pearl conducts energy audits that will allow us to identify and quantify them for you.Back to news