Despite a particularly challenging winter for predicting demand, our Triad forecasting team has called all three Triads* correctly.
As confirmed by National Grid close of play on Friday (26 March), the three periods of peak demand across the winter 2020/21 season were:
- Monday 7 December – 1700-1730 (44,449 MW)
- Thursday 7 January – 1730-1800 (45,450 MW)
- Wednesday 10 February – 1800-1830 (44,997 MW)
If your business pays non-commodity charges on a pass-through basis, your consumption during these periods determines how much you pay in National Grid transmission charges (Transmission Network Use of System or TNUoS). [If you’re on a fixed contract, these charges are already included in your overall rate.]
For the 2020/21 season, this could be as much as £59,267** per megawatt, depending on your location. This increases to up to £61,676/MW*** for winter 2021/22.
Then from April 2022, a new system of calculating transmission charges will be introduced, of which more in a minute…
Forecasting demand in a lock-down scenario is especially challenging. For starters, with so many people stuck at home all day, the usual after-work/school ‘tea-time’ surge in domestic consumption flattens out. And with widespread operational disruptions, business and industrial use has been far harder to predict.
The team even considered whether they would need to issue Triad warnings on some weekend days. For example, Sunday 6 December (1700 – 1730) was forecast to out-turn as the highest demand of the preceding week.
The weather was also unpredictable this season, with cold, still periods coming in fits and starts rather than one long continuous blast. A series of ‘micro-beasts’ if you like!
Growth of renewables
Our changing energy mix creates further challenges for forecasting supply and demand. For example, with increasing volumes of wind generation connected at the furthest reaches of the country, transmission losses (that is the energy lost due to travelling through the transmission network) are greater.
Then there’s the impact of more large consumers Triad managing, which smooths potential peaks as these businesses turn down demand.
It’s this last factor that is likely to cause additional problems – and expense – for National Grid.
Loss of Triad incentive to impact system
This is because once the Triad system of calculating transmission costs for the residual portion of these charges (which can account for as much as 85%, depending on location) is replaced from April 2022, there will be less incentive for large consumers to reduce consumption during peak demand periods. [The changes are due to Ofgem’s Targeted Charging Review (TCR) – you can recap on the detail here: https://www.energy-hq.co.uk/information-and-resources/webinars/targeted-charging-review-tcr-explained/]
National Grid estimates the Triad system reduces the UK’s peak national demand by around 2GW over the winter season, which is the equivalent generation volume of a large coal-fired power station.
So ensuring continuity of business energy flexibility is an essential part of meeting the UK’s Net Zero commitments.
Cost savings and site resilience
Whether your business already Triad manages or not, embracing greater flexibility around energy use will become more important – not only to save on growing energy-related non-commodity costs, but also to introduce greater site resilience.
With the recent Capacity Market T-1 auction out-turning at a record £45 per kilowatt (£45k per megawatt!) for 2.5GW secured generation volume in 2021/22, the need for business demand side response (DSR) activity looks set to increase.
There are also opportunities to save from Market Access services (whereby you sell back volume to the market at peak times, turning instead to on-site generation or battery storage). National Grid already runs a number of schemes to purchase operational flexibility via DSR. And we are likely to see more local DSR schemes emerge via Distribution Network Operators.
To find out how your business can take advantage of current and future opportunities, speak to your Client Lead (for existing customers). Or drop us an email to firstname.lastname@example.org and a member of our DSR team will be in touch.
* A Triad is one of three half-hour periods with the greatest national power demand between 1 November and 28/29 February. Triad periods are most likely to occur between 4.30pm and 6.30pm on weekdays, but have to have at least ten days in between each one.
** Half-Hourly Demand Tariff for London area for 2020/21, as published by National Grid.
*** Half-Hourly Demand Tariff for the South Western area for 2021/22, as published by National Grid.