Winning value in the fast-changing environment of power flexibilityA thought leadership paper from CGI and New Power. Britain’s electricity system is in transition, but flexibility still largely comes from dispatchable thermal generation. As that is replaced by inflexible, intermittent renewables, alternate sources of flexibility must be established.
Energy Flexibility For DummiesEnergy Flexibility for Dummies is your essential pocket guide to flexibility in the electricity system. Get your copy now.
Decarbonising how we satisfy our energy needs will drive the most radical change to the electricity system since the construction of the national grid almost a century ago. It will create new business opportunities for energy companies to fundamentally reframe relationships with their customers by de-commoditising the commodity energy market.
Those customers that have embraced low carbon technologies into their homes and lives and choose to make the intrinsic energy flexibility of these technologies available to the electricity system will have meaningful choices about how they satisfy their energy needs. For the first time, they will have genuine control over their bills by not simply limiting how much they consume, but by managing when they consume.
The businesses that succeed in this new market will simultaneously deliver customer value whilst managing the risks of investing in new technology. This will mean enabling consumers to gain the full benefit from the inherent flexibility of their low carbon technologies and intelligent devices.
Success will require new organisational capabilities, new business models, new collaborative commercial relationships and new systems to operate a business.
Whether that is about embracing digital approaches to satisfying customers’ needs or getting timely access to necessary data and developing the insights that enable our clients to succeed in their chosen markets, CGI is here to help.
Consumer-centric, big energy suppliers
You have the opportunity to change your relationship with actively engaged customers, while rebuilding trust and brand equity by reflecting the costs of electricity when customers consume it.
- New entrant suppliers
You’ll have the ability to offer something different to consumers by breaking the link between your wholesale electricity costs and the wholesale energy market.
- Asset-intensive electricity distribution and transmission companies
You have to find new ways to deliver safe, reliable and economic infrastructures that are able to support low carbon supply and demand.
- Water sector organisations
You have the opportunity to explore your role as a flexibility provider, or even your level of interest in diversifying into the electricity retail sector.
Accessing flexibility in the power system allows you to remove pinch-points (at either transmission or distribution level) by flexing demand, shifting load away from peak times or by distributing and storing power generated at times of lower demand. This means you can deliver power to the right place at the right time, avoid an overloaded network and prevent the issue of low voltage and frequency.
Create new business opportunities
A flexible power system creates potential commercial benefits for the whole electricity sector. Aggregators and energy retailers can determine customer demand, and agree with the network operator at distribution level — or the system operator at transmission level — to turn down demand at peak times (or turn demand up when there’s an abundance of supply), and receive financial incentives for doing so.
Balance your system
You have to balance your system — or risk a shutdown. Generally, to do this, you try to match demand with supply in near real-time, keeping the system frequency in a narrow operational range of 50+/-0.2 hertz. Energy flexibility, however, creates numerous new (and cheaper) ways to balance the system.