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National Grid Service Contracts

What are National Grid Service Contracts?

National Grid Service Contracts can be accessed by deploying a battery energy storage system on your site you will have the ability to generate income for your business, reducing your total energy costs and the payback time on your investment.

Unlike a traditional Uninterruptible Power Supply (UPS) system, which cannot be used to generate additional revenue, a Powerstar UPS can be used as an income stream while serving your site with power resilience. Extra revenue from grid services could be the icing on the cake while solving your power resilience or grid constraint issues.

How is revenue generated with National Grid Service Contracts?

In simple terms, the energy that is stored in the battery energy storage system can be sold to the National Grid, thus generating revenue for your business.

In order to do this, you will need a contract with National Grid or your local Distribution Network Operator (DNO).

These contracts can take some time to put into place and often require the services of a third-party aggregator to manage your asset and ensure your contractual obligations are fulfilled. Failure to meet these obligations can result in fines.

Demand Side Response (DSR) contracts enable a business to generate additional revenue by supporting National Grid in intelligently managing supply and demand. DSR involves end users dynamically increasing, reducing or offsetting their demand to help to balance the grid. 

This is becoming increasingly important as the National Grid has more and more intermittent power generation from renewable sources. These grid service contracts are sometimes referred to as ‘balancing services’. 

Battery storage allows end users to fulfil a DSR contract by turning up, turning down or offsetting their demand in real-time, helping National Grid to soften peaks in demand or balance out troughs. As well as generating additional revenue through a DSR contract, this can also help to secure a better price for surplus power by selling it when it is most in demand. It also helps to get the most value from on-site generation by selling excess power back to the grid when it is most in demand. 

Firm Frequency Response (FFR) services contract you to provide a certain amount of standby support per day, so that the National Grid can ensure there is sufficient generation and demand available to manage all circumstances that might result in frequency variations. A battery system is essential to be able to fulfil these contracts.

Powerstar’s Energy Management Software controls the battery to dynamically manage the requirements of these contracts. By using artificial intelligence to predict your own load requirements, on-site generation, and the optimal time to be supporting the grid, it ensures you are generating the maximum possible revenue without impacting operations.

How much revenue can be generated from National Grid Service Contracts?

In the past, many businesses have implemented battery energy storage technology with the main goal of generating revenue from grid contracts.

However, the revenue from these services is not guaranteed and the level of compensation available will no longer pay for the battery system on its own. Additionally, accessing them requires the services of a third-party aggregator who will take a percentage of the revenue for managing your asset.

For example, a DSR contract might earn you £0.075 per kWh that is supplied back to the grid. If you were able to supply 1MWh for 100 days per year you would generate £7,500 per year.

Today, generating revenue from grid contracts only makes sense as a secondary benefit. When employing battery energy storage at the heart of your energy strategy to achieve power resilience or net zero, generating revenue through grid services provides a secondary boost to improving the return on investment (ROI) of the project.

Powerstar are a technical solutions provider specialising in solving complex power management problems for our customers. If you are only looking for a battery energy storage system to generate revenue from grid services, without needing the wider energy management & power resilience options that a battery can provide, we may not offer the right solution for you.

Get in touch to discuss how your business could earn additional revenue from its energy projects

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