Smart grid management strategies trialled as part of the Low Carbon London project will save consumers £43m over the next eight years, says UK Power Networks.
Having concluded the four-year programme at the end of December 2014, the distribution network operator has released results of the study in a comprehensive report today, addressing multiple aspects required for the transition to a low-carbon economy, including flexible tariffs and electric vehicle charging.
“Low Carbon London brings us a vital step closer to the low-carbon future and tackles the ‘energy trilemma’ to deliver low-carbon, affordable, secure power supplies,” said Martin Wilcox, head of future networks at UK Power Networks.
“As green forms of electricity production, heating and transport increase, intelligent systems will be essential to monitor, control and balance significant extra pressures on our networks, without human intervention. Low Carbon London has tested new smart grid techniques in ways that have never been attempted before in Britain.
Involving 11 partners and with an overall budget of £28.3m, the project included the UK’s first trial of Time-of-Use electricity tariffs designed to motivate customers to consume energy at times of low demand and abundant supply of renewable power.
“The beauty of the dynamic use tariff is that it really covers the entire industry,” said UK Power Networks Low Carbon London programme director Michael Clark. “It allows suppliers to balance their position in the wind or any other renewable-dominant market but it also enables customers, for the first time, to choose how they interact with their supply and that really is a forerunner to a lot of the tariffs that will come in the future.
As part of the trials, 5,000 London households, all EDF Energy customers, were fitted with smart meters, with 1,100 of them being tested on the flexible Time-of-Use tariff. The flexible tariff test subjects were receiving text messages informing them if special electricity prices would apply to them the next day – those involving either the incentivised 3.99p/Wh price or the demotivating 67.20p/kWh.
UK Power Networks said the incentives led to participants reducing their peak demand by 8 per cent and allowed considerable financial savings.
“Engaging with customers is definitely the key message that we have learned from this project,” said Adriana Laguna, UK Power Networks commercial strategy lead. “Customers need to understand why we are installing smart meters in their houses, what are the different tariffs that are getting implemented, what do they mean. They need to understand the key role that they can play in helping everyone to migrate towards the low carbon future.”
In a separate experiment, the network operator tried to motivate operators of large buildings with independent electricity generators, such as shopping centres, hotels or business facilities, to turn on those devices to help cover peak consumption periods, or alternatively to reduce their consumption by, for example, dimming lights.
Such measures combined, UK Power Networks believes, could enable network operators in the future to manage their assets without excessive additional investment.
“Networks are designed to sort of fit the worst case, which is essentially when everybody is consuming,” Laguna explained. “But if we are able to more actively manage how many people are connecting, how many people are using electricity at a certain point of time, the network operators would not have to invest too much into infrastructure to kind of oversize the networks when we can be a little bit smarter about how we use them.”
UK Power Networks estimated the overall savings on network reinforcement resulting from data gathered during the trial would translate into overall savings of £43m for the company’s customers.
“We will be deferring network reinforcement, we will be managing our network more dynamically,” Clark explained. “By deferring investment or giving ourselves some optional value as to whether to invest at all, due to real load growth not just forecast, this enables us to cut the bill to customers.”
The trials also looked at the effects of electric vehicle charging on the electricity grid and tested ways to mitigate the impact by either motivating users to charge at off-peak times or alternatively using active network management systems to reduce the load.
Transition to smarter greener grids is generally considered as a key component for achieving emission reduction targets.
UK Power Networks believes knowledge acquired in the trials could be extrapolated for other cities across the UK and globally.
The area of Greater London presents specific challenges as it has the highest concentration of electricity demand and the highest CO2 emissions in the UK, as well as the most demanding carbon reduction targets (60 per cent reduction on 1990 levels by 2025).
UK Power Networks contributed £6.6m to the project’s funding with the rest having been covered through a Low Carbon Network Fund.