National Grid’s lucrative ‘power balancing’ schemes help foundries generate £70,000 per Megawatt (MW) saved, says CEO of Endeco Technologies Michael Phelan.
Few will be oblivious to the UK’s electricity supply challenges, with some estimates putting spare system capacity at just 1.2 per cent in the winter of 2015-16. Many assumed renewable energy would be the saviour. In reality, however, the inflexible nature of renewable energy sources coupled with the challenges of controlling grid stability in real-time, presents a major challenge for grid operators.
Instead, experts suggest that the answer lies with schemes such as firm frequency response (FFR), which is part of the National Grid’s broad DSR (demand-side response) suite of solutions. In the simplest terms, this means sufficient load can be generated or removed from the Grid to stabilise frequency.
Earn extra income
To ensure the success of such schemes, the National Grid offers those that participate the potential to earn extra income from assets by automatically adjusting power consumption in real-time. This helps grid operators reduce the need for coal- and gas-fired reserves to be ready to supply power at short notice.
The financial and operational benefits for participating companies can be very significant, with sums of up to £70,000 achievable for every megawatt (MW) of average onsite energy consumption saved. This is in return for around ten (on average) ‘turn-down’ events per year, lasting for a maximum of 30 minutes each. In 2015 specifically, there were six ‘turn-down’ events.
Some of the foundries Endeco works with are averaging around 4MW of savings per year, equating to £280,000 of new income. As a point of note, at a typical operating profit of 4 per cent, it would take £7 million in new sales to generate the same amount.
The National Grid is prepared to pay such high rewards as it has an obligation to ensure that sufficient generation and/or demand is held in automatic readiness to manage all credible circumstances that might result in frequency variations.
Despite the incentives, there are barriers to uptake and there is still much to do to raise awareness of the possibilities for commercial returns. As a result, relatively few foundries understand which DSR scheme is right for them.
Here, a partner company known as an aggregator - that will be approved by the National Grid - is required to help make the right choices and optimise returns. In addition, the selected aggregator will 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 provided without any capex requirement, with the aggregator simply taking a share of the scheme pay-out instead.
Of course, the major asset affected is the furnace, which typically uses around 60-65 per cent of all energy supplied to the site. Further foundry assets suitable for schemes such as FFR include heat treatment ovens and compressed air systems, sand mixers, reclamation systems, thermal/mechanical attrition systems and blowers. In addition, the scheme will also suit diecasters using energy-intensive hydraulics, pumps and motors, along with investment casters that employ robotic system ranges.
At a technical level, Endeco’s own wireless optimisation platform uses advanced algorithms and automated dynamic scheduling to connect to the plant, and deliver real-time control. Each end-user has a personalised optimisation dashboard that presents data such as energy consumption, asset comparisons, stoppage time, melt time, analysis of percentage run-time per shift and day, and the number of melts per shift, per day.
This kind of technology platform takes the foundry further on the road to efficiency with its load shifting capabilities. Here, demand is measured automatically by shifting sand mixers and blowers when the furnaces are running.
Response schemes are always likely to change over time and participating companies must be technology-ready to access more financially attractive tariffs. Not all platforms or aggregators can achieve this. However, the aforementioned advanced platform makes switching easy to facilitate.
A total of 40 sites moved from FCDM (frequency control by demand management) to FFR overnight when the latter scheme was released by the National Grid in July 2015.
Endeco is the only aggregator currently able to offer all of the DSR schemes operated by the National Grid, thereby ensuring it can provide customers with the best value option. The company has also invested circa £5 million and over 40 man-years in the development of its technology and energy optimisation platform.
Endeco Technologies is a member of the Cast Metals Federation. The company is a ‘National Grid Approved Aggregator’, which today actively controls more than 200 customer sites across the UK and Ireland across a wide range of industrial sectors and applications. This includes a number of foundries.
Richard Heath, health, safety and environment officer at the Cast Metals Federation shares his thoughts, and those of CMF members, on frequency response schemes
Q. To what extent are CMF members already undertaking energy-related strategies?
A. A significant proportion of members have been looking at energy saving rather than revenue generating schemes for a number of years. This usually entails reviewing energy bills and suppliers, investing in energy efficient plant and, in some cases, melting or casting overnight to avoid peak charges. However, since the CMF first met with Endeco Technologies (now a CMF member) in 2014, a growing number of members have been adopting schemes such as FFR, with encouraging results.
Q. When mentioning these schemes to your members, what level of understanding do they have?
A. When we mention schemes such as FFR, they seem to be new to everyone. There is still a general lack of awareness out there, with many only focussing their attention on energy procurement packages.
Q. What barriers exist to greater take-up?
A. The main barrier seems to be knowledge of how the schemes actually operate; how will they work in practice? This is a complex arena that goes way beyond the basics of peak-tariff avoidance. It can take a while to fully comprehend how schemes such as FFR operate.
Q. What does turning down the power actually mean for your members?
A. Many members are concerned that if they are faced with a tight deadline, and the induction furnace gets switched-off, that they will have to let down the customer and be left with a furnace full of waste metal. However, in theory, a ‘turn-down’ event will merely delay the length of time to achieve full melt. A problem would only occur if the power is completely cut, which is not the case with FFR.
Q. What are the most common questions asked by your members on this topic?
A. How much does the kit cost, how regularly do the events occur, what notice do you get, and is cashback available on a pro-rata basis? For instance, would an end user receive payment for 0.5MW? The answer, we have since found out, is yes.
Q. What is the potential of schemes such as FFR among your membership?
A. I think more and more will get involved over time. The largest part of our membership is made up of sand casting foundries that use induction furnaces, and these will benefit the most. However, pressure diecasters use hydraulics and other systems that require large pumps and motors, so there is potential there, too. Around 30 per cent of our members use gas-fired furnaces, which cannot currently benefit from the schemes, although we believe this may change in the long term.
Q. What guidance would you offer to members regarding participation in these kinds of schemes?
A. Participation in these schemes makes sound commercial sense. We are encouraging members to explore the possibilities and look to the market to see what is possible from their plant and assets. At £70,000 per MW, the arguments for participation are hard to ignore.
Contact: Endeco Technologies, 54 Clarendon Road, Watford WD17 1DU UK, Tel: +44 (0) 1923 431 638, email: firstname.lastname@example.org web: www.endeco-technologies.com