Electrification is a key tool for decarbonisation for most organisations and will play a key role in the shift away from fossil fuels to a system that is built around renewable energy. Replacing carbon-intensive fuels used on-site, including natural gas, diesel and LPG, which can make up the bulk of carbon emissions for many energy-intensive businesses such as manufacturers, with electrified alternatives, is crucial if your organisation is looking to progress towards the goal of net zero.
However, many organisations that look to invest in electrification, including replacing equipment, installing rapid EV charging or on-site generation such as solar, find that it is often much more difficult than a simple purchase. One of the biggest stumbling blocks, which has steadily increased in prominence over the past few years, is issues around grid constraints.
What Issues Can Be Caused by a Constrained Local Grid?
Additional electrical equipment increases the total demand of a site, which can cause issues in two related but separate ways. The first is that the site then exceeds its agreed supply capacity (ASC), the maximum amount of electricity that your DNO must provide your organisation. ASC differs from site to site and will be identified in your monthly energy statements. Expanding activity so that your site exceeds your ASC comes with very substantial surcharges, known as excess capacity charges.
The second issue is for larger projects, the planning process typically will require a request to your DNO for permission ahead of installation and commissioning. Large increases in demand on a site, as well as increased exports such as the installation of on-site generation, place additional strain on local distribution networks, at can increase the risk of localised power disruption. If a DNO has concerns over how a project will impact power resilience, it can require costly additional connection works to be carried out first or block the project outright. The huge increase in distributed generation across the UK has placed substantial stress on many distribution networks, and issues around DNO approval are becoming increasingly common.
What Are the Solutions?
In an ideal situation, the solutions to both issues surrounding grid constraint should be relatively straightforward, if expensive. An application to increase ASC can be made, which if approved would increase monthly bills but eliminate the punitive excess capacity charges, delivering a net reduction in cost.
For projects that fall at hurdle of DNO approval, one option is to pay for an additional grid connection to be installed. For a typical large business, National Grid estimates a cost of £65,000 and a wait time of two years. For larger or more complex projects, this price can risk significantly, with the estimated wait time extending out to around two years.
The surge in applications for both battery storage and renewable generation projects across the UK has hugely increased wait times, to the point that Ofgem is taking urgent action to try to reduce them. In November of last year, the Telegraph reported 80 new applications every month, with many applicants being told that they faced a wait time of over a decade.
The Powerstar Solution
Rather than increasing a site’s demand on the grid, Powerstar’s smart microgrid solution instead focuses on using electricity on a site more intelligently, as well as using storage and on-site generation to balance supply and demand dynamically.
This allows available generation when conditions are ideal, such as during sunny, windy weather, to be fully exploited by storing additional energy for use when generation conditions are lower, or to meet the increased capacity of new technologies. The implementation of a battery is also an important step for securing DNO consent on many projects, as it allows energy-intensive technology to be powered using the battery as a buffer to prevent surges in demand on the grid. Our comprehensive digital modelling and feasibility study services are also an invaluable tool when it comes to securing approvals for a project, as it allows us to demonstrate to a DNO that a proposed project will operate as expected across a broad range of different external factors and won’t present a risk to local grid resilience.
