London, U.K. --- (METERING.COM) --- October 19, 2012 - UK Power Networks is trialling ground breaking contracts which encourage industrial and commercial customers to help reduce electricity demand on its networks at peak times when called upon to do so, in return for payments.  

The research, part of the Low Carbon London (LCL) initiative funded by Ofgem’s Low Carbon Networks Fund, aims to investigate and demonstrate reductions to the carbon footprint and cost of distributing electricity in London.

A number of major business customers, including ExCel (signed up via Flexitricity), a major London department store (via EDF Energy), and a London visitor attraction (via EnerNOC), have signed contracts with aggregator partners.

The customers participating in the program agree to reduce their demand when called on to do so by a defined number of megawatts of electricity between times of estimated higher demand on the electricity network. Customers can also be called upon to reduce demand where UK Power Networks is managing a constraint on the network, such as a fault on a piece of equipment.

The contracts with the aggregators are an established way of helping to balance the national transmission system managed by National Grid. Now UK Power Networks is exploring their potential to balance electricity supply and demand locally on the electricity distribution network.

As part of the trial, UK Power Networks pays industrial and commercial customers, via an aggregator, to take less electricity from the network at times of peak demand. Customers curtail their electricity demand from the network by either switching to back-up generation or increasing electricity output from installed combined cooling and heating power equipment, or simply by reducing their electricity usage.

“The trials will establish the amount of business interest in innovative responsive demand contracts,” explained Liam O'Sullivan, Low Carbon London program director. “Energy aware businesses can gain financial rewards from reducing their electricity demand where this helps UK Power Networks to operate our electricity system more efficiently.”

Systems are installed within the customers’ premises to enable demand response to happen by remotely starting generators or curtailing demand. This is preferable but the customer can choose to remain in control of their generating equipment. The customers can opt out at any time, ensuring that any participation does not have an adverse effect on their core operations.

The research will also be looking at whether businesses that can be flexible with their electricity use can also adjust their demand in response to intermittent wind generation.

Low Carbon London is looking to a future where demand response will be an important tool in managing the electricity network. Long term, the contracts might reduce the level of investment needed in equipment such as new transformers and cables to serve growing demand. The contracts could also reduce reliance on carbon intensive power stations.