No More Lazy Sunny Sunday Afternoons for U.K. Factories

(Bloomberg) -- Britain's grid operator may pay big energy consumers to use more electricity on sunny weekends when solar energy is plentiful and demand is low.

National Grid Plc is consulting with customers on ways to adapt its network to the rise of renewables, including rewarding factories and businesses for boosting consumption at times of high solar generation, Cordi O'Hara, director of the network's U.K. system operations, said in an interview in London. Paying users is seen as a cheaper way to balance the grid than reimbursing producers for halting output.

Grid demand currently drops to the lowest at night, but by 2020 that could be in the afternoon as the growth of solar farms mean users are less reliant on network supplies at those times, according to National Grid. Minimum summer demand on the grid was 16.8 gigawatts last year, about half of the average capacity used in the past 12 months, grid data show.

“What we're seeing is the expansion of solar on the network changing the shape of demand in our afternoon,” O'Hara said at the Future of Utilities conference in London on March 29. “Why not turn up demand and use it? It might be smart.”

National Grid already has a service it calls Demand Turn Up where companies can adjust how much power they use when there is excess energy in the system. This eases the need for other grid balancing measures such as calling on power producers to reduce output. The program saved National Grid 500,000 pounds ($625,000) in balancing costs last year, said Stewart Larque, a spokesman for the network.

Under another program, Tata Steel Ltd. and utility EON SE were among 10 companies that showed they're willing to provide demand response services in a March 22 auction designed to spur companies to reduce demand when power supplies are low.

The network is seeking to boost its ability to forecast increases in solar generation as it considers the new services, O'Hara said. Solar output in the nation will more than double in the decade through 2025 under a scenario where the country aims to meet its climate targets, according to grid projections. It will rise 48 percent under business-as-usual conditions.

“If you only look at the system and how we operated it historically, you might think there's a problem,” O'Hara said. “But if you innovate, which we've done already, it's just a different way of operating the network.”

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net.

To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net, Andrew Reierson, Rob Verdonck