Posts Tagged ‘DNO’

I’ve been talking to an electricity aggregator this week, exploring possibilities for getting better value for the electricity from small combined heat and power units (CHPs). This is important because better value for electricity = lower tariffs to the homes using the heat.

We were looking specifically at using these CHPs to take strain off the local grid during times of extraordinary demand. Having this spare capacity available in an emergency is worth a hell of a lot to the DNO, who runs the local network. In fact, for each megawatt of generation capacity, you might get paid several tens of thousands of pounds each year.

So what do you have to do to get paid? Just be ready to generate electricity at short notice. They’ll probably only call you 6 or 10 times each year, and probably only need you for an hour or so each time. Easy.

At last! The benefits of producing energy locally get some recognition, right? Well… no.


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On-site generation only works if you get good value for the energy you produce. For example, the viability of CHP (and the resulting cost of heat) depends on the price you get for the electricity you generate.

So what are your options? You could export to the grid under an offtake contract with a licensed electricity supplier. But as a small generator your electricity is almost worthless to them so they won’t pay much for it: maybe 2 or 3p. So unless you’re able to negotiate a particularly sweet contract, this is usually a non-starter.

The obvious route should be to sell energy directly to people on the site where the energy is generated. That’s supposed to be the point of distributed energy, right? (more…)

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