United Utilities is the first company in the North West and the first water firm in the country to sign-up for the National Grid’s innovative ‘Dynamic Demand’ system which switches power-hungry equipment off and on in response to changes in electricity supply and demand nationwide.

Over the next five years the company expects to have a total of 50MW of flexible capacity to offer up to National Grid – the equivalent of a conventional power station – reducing carbon emissions by 100,000 tonnes per year. The income this will generate is around £5m, which will be reinvested into site assets to reduce operating costs.

The system acts like a “virtual power station”, allowing National Grid to even out temporary peaks and troughs in demand instead of turning power stations up and down. The more companies involved the bigger the potential for benefits.

Smart boxes installed at United Utilities’ treatment plants and pumping stations allow the process equipment to “talk” to the grid. Motors and pumps can be turned on and off in seconds in response to variations in power frequency.

Andy Pennick, Energy Manager at United Utilities, said it was all part of a drive to use power more efficiently.

“Water and wastewater treatment is a really energy intensive process – power is one of our biggest operating costs – so we’re looking both inside and outside our business to see how we can work smarter. That means using less power and being willing to be flexible in the way we use that power.”

The flexibility of the system lends itself much better to the UK’s increasing use of renewable energy sources, which are much more intermittent than traditional gas and coal-fired power stations, which are gradually being phased out.

The electricity market in the UK is shifting. Traditionally generation has been adjusted, minute by minute, to meet demand for power, with gas fired power stations kicking in whenever there was a surge in demand. From next year some gas fired power stations will be decommissioned and the UK is increasingly moving towards intermittent renewable energy like wind farms. It is becoming harder to generate power at the flick of a switch, so the system has to become more flexible.

The Dynamic Demand system balances the equation the other way – adjusting demand to meet the power available. Large energy users like water companies can identify which items of equipment are not time-sensitive in their operation. This equipment can then respond within agreed parameters to provide a service to National Grid.

United Utilities has trialled the initiative at three sites - its wastewater treatment plants at Bolton and Birkenhead and a water pumping station at Hoghton near Blackburn. The results were so successful that it is now rolling out the programme across the whole North West region, with 10MW being available within the next 12 months.

Over the next five years the company expects to have a total of 50MW of flexible capacity to offer up to National Grid – the equivalent of a conventional power station – reducing carbon emissions by 100,000 tonnes per year. The income this will generate is around £5m, which will be reinvested into site assets to reduce operating costs.

Open Energi, the company behind ‘Dynamic Demand’, is predicting that the UK value of the demand balancing market for large energy users will be around £1 billion by the year 2020.

Ged Holmes, Commercial Director at Open Energi explained:

“Balancing electricity supply and demand is vital to the operation and security of the UK electricity system but as more of our energy comes from less predictable, renewable sources it is becoming increasingly challenging. We provide National Grid with the kind of demand-side flexibility it so urgently needs without any impact on our customers’ operational processes. For large energy users like United Utilities, Dynamic Demand provides a new source of revenue which can help to offset rising energy costs and support energy efficiency measures.”

Andy Pennick added that with a lot of tanks and water storage within its processes, United Utilities can be flexible about precisely when pumps are used and that the lower operating costs are good news for customers.

United Utilities is also investing in renewable energy generation from wind, solar and combined heat and power. There are plans for wind turbines and solar panels to be installed at treatment plants and other sites in appropriate locations, while wastewater sludge is being recycled to produce biogas that can be burned to generate electricity. The water company expects to be able to generate 200GWh of renewable energy per year by 2020.