HOW TO GENERATE ADDITIONAL REVENUE FROM YOUR

STANDBY GENERATORS Prepared by Glyn Goodwin and Philip.S.Lawrence

Vale Energy Ltd and ValeEC, Vale Energy’s Consultancy on DSRS, have aligned themselves with the leading aggregators in the Demand Side Response Services sector. to work on behalf of clients.

ValeEC’s services enables clients to explore the DSRS market place and secure the best revenue returns for the use of their existing energy generating assets from the numerous aggregators in this space.

An example of how much you could generate from your STANBY GENERATORS:

below is based on switching on standby back up diesel generators to displace site load and export spare capacity. The backup diesel generation identified (2x1280kW) will have no impact on your core business or day to day operations as long the assets have been set up with the G59 protection relay to operate in long term parallel, cost of any upgrades necessary to be quoted after a site survey is completed.

The table below indicates the kilowatt (kW) value that could be utilised and a breakdown of the potential revenue and savings.

Note that the kW number available reflects specific programme parameters and the strategy in place.

Cost Revenue Saving

Demand Response and Standby Generators.The basics:

1. What do aggregators do?

An aggregator is a smart grid company that specialises in managing the demand side of energy consumption for large industrial and commercial consumers of electricity and for government regulators. The technical term for what they do is called Demand Response.

2. How does it work?

By intelligently managing non-essential energy used by their clients, the aggregator reduces their consumption during peak demand times. The National Grid in the UK pays for this service, which eliminates the need for expensive and polluting peaking power stations used today to avoid black-outs. We bill the National Grid and they cover our costs.

3. What’s in it for me?

A New Revenue Stream: National Grid pays us to be available to provide this programme and makes further payments whenever it is used. We share these payments with our customers, who own the assets used in this programme. Thereby transforming these assets which had previously been cost items into a source of profit.

Improved asset reliability: Standby generators need to be run regularly on-load to ensure that they provide reliable emergency power. Generators which are only tested off-load have a much higher likelihood of failure in service. All assets connected to the aggregator are continuously monitored and we can inform you immediately of any concerns.

Helping to reduce your carbon footprint: The aggregators Demand Response programme is a low-carbon source of reserve electricity for the national electricity system. Every megawatt of capacity connected to the aggregators virtual power station is a megawatt that does not have to be made available elsewhere. This reduces the need to keep more carbon-intensive coal and oil power stations on standby or running inefficiently on part-load as well as staving off the cumulative future effects of new build consisting of intermittent (wind), inflexible (nuclear) power supply and a large reduction in current generation capacity which have an impact on reliability of supply.

4. Will it disrupt my core business?

No. Our Demand Reduction Strategy is customised to never impact production or comfort. We will only ever turn down your consumption for a short period of time, never more than a few hours, and we will only target non-essential items. You have full control over this and we won’t ever force you to do anything that you are not comfortable with.

5. How often is the service used?

This service is aimed at targeting non-essential systems infrequently and will never impact on production.

6. What will it cost?

The aggregators engineers perform a site and energy audit for free as part of the client sign-up process.The aggregators work with the assets that you already own. Some work will always be required to connect their communications equipment to your controls. For standby generators, there may also be a capital cost to allow the generator to run in parallel with the local distribution network. We prefer to support your contractors, and will help you evaluate the return on investment.

7. How can running standby generators be good for the environment?

In two ways. First, no CO2 is released in keeping a standby diesel in reserve; the same is not true of large peaking power stations. Second, the aggregator runs generators only when the oldest and most polluting power stations would otherwise be needed.

8. What’s the catch?

There is no catch. The aggregator we suggest you use does not use penalty clauses. Instead, strong relationships and proven technology are our guarantee of performance.

9. Do aggregators generate, supply or trade electricity?

Some do and some don’t. The best aggregator to use is the one that best suits your business needs and flexible assets.

10. Why are aggregators needed?

It is not practical for National Grid or Electricity Suppliers to directly access the generation or flexible consumption capabilities of most industrial or commercial sites. Aggregator’s virtual power station concept aggregates typical sites into larger units which are directly useful in balancing electricity supply and demand.Aggregator’s clients have critical business matters to attend to; their staff are simply not available to run part of this power network. The aggregators approach therefore removes operational burdens while leaving ultimate control in the site’s hands.

11. What do my site operators have to do?

Because aggregation is fully automated on most sites, your operators do not need to have any routine involvement in the aggregators operation. We won’t ask your team to operate a virtual power station on top of everything else they have to do.If you prefer, you may choose to route the aggregators calls through your control desk, giving your operators direct involvement in the process.Either way, your staff will be able to inhibit the aggregators operation at any time at the turn of a switch. This gives your team the ability to opt out should they have any concerns about the plant.

Standby Diesel Generators:

1. What happens if there is a power cut?

The aggregators will ensure that site power supply security has top priority at all times.Most of the time, your generator(s) will be stopped and in AMF (Auto Mains Failure) mode. If the mains supply fails, the generator(s) will start and supply power to the site.If the mains fails while the generator is running, the mains circuit breaker will open and the load of the site will be carried by the generator(s) without interruption.The detailed implementation of this is site-specific. Load sharing, load acceptance and site load profile must all be properly balanced and considered alongside G59/G75 protection requirements.With the aggregators running your generator(s) this should significantly reduce the risk that a standby generator(s) fails to deliver during a power cut.

2. Will there be a break in supply when the generator(s) start?

No. The aggregators program thrives to ensure a seamless change in power supply so that there is no noticeable difference that could affect the main operation of your business.

3. How can a generator(s) be used by the site and by the aggregator at the same time?

When the site needs the generator(s), the aggregator backs off. Your staff also have the ability to lock out the aggregator in the event of concerns. However, for the vast majority of the time, generators are idle and can be providing a lucrative and environmentally positive service to the national electricity system.

4. I can’t afford to increase the risk of power failures. How is this avoided?

The aggregator understands and appreciates the concerns organisations may have regarding the risk of disruptions to their business activities. We have therefore come up with the following steps that will help minimise the risk of generators failing to deliver in an emergency:We encourage businesses to commit to regular maintenance and testing, undertaken by a good quality contractor.

Operating generators regularly on-load, exercising all circuit breakers and turning over fuel stocks. With the aggregators Demand Response programme all of these can be achieved whilst turning a profit.Carefully considering the matching of site load to available generation.

5. What are G59, G75 and G83?

Engineering Recommendation G59/1 of the Energy Networks Association sets out the requirements for safely operating generators of capacity between 5kW and 5MW in parallel with the electricity distribution networks. G59 protection will:Prevent your generator from feeding into faults in the distribution network;Disconnect your generator from the network if the mains fails;Prevent your generator from keeping parts of the distribution network energised in a network fault.Although G59 protection is relatively simple, different Distribution Network Operators implement it in very different ways.The G75 standard is very similar to G59, but applies to embedded generators larger than 5MW. The G83 standard is rather different and applies to microgenerators (which generate less than 16A per phase at 230V).

7. Does my generator need to synchronise with the mains?

There are three options for running generators with one particular aggregator:

A. Full parallel running – generators start, synchronise with the mains, and ramp up to a fixed output power. The mains remains connected while the generators are running. The local Distribution Network Operator (DNO) must give permission for this type of operation. It provides the maximum flexibility for the aggregators operation, testing and maintenance, and generates the maximum revenue for you.

B. Short-term parallel (STP) running – this mode is also known as “soft load transfer” or “bumpless transfer”. Generators start and synchronise with the mains, then ramp up power until the generator output equals the site load. The mains circuit breaker is then opened, and the site runs as an “island”. Stopping generators is the reverse process. The local Distribution Network Operator (DNO) must give permission for this type of operation. The DNO’s requirements may be simpler than for full parallel operation, but this mode does not exploit the full value of the generator and isn’t suitable for all sites.

C. Changeover or “break transfer” – site load is transferred to generator power with a break in the mains supply. This mode is only suitable for one particular aggregator’s operation if the full site load is supported by a high integrity Uninterruptible Power Supply system.

8. Are my standby diesel generators reliable?

If you run a purely reactive maintenance regime, or if you only test generators off-load or with load banks, then no, your generators are not reliable. In fact, hidden failures are encountered on even the very best sites. Typical problems include:*Failed starter or breaker tripping batteries, or failed battery chargers;*Corroded or seized contacts, relays and circuit breakers;*Blocked fuel filters, fuel line or tank corrosion, contaminated fuel, inoperative fuel level gauges and fuel theft; Oil leaks, failed oil pumps or fuel-contaminated oil (which can result from off-load testing);*Failed engine block and alternator heaters;

Cooling water leaks and radiator fouling;*Coking, “slobber” and bore damage from off-load running;*Incomplete commissioning or acceptance testing, resulting in illogical and ineffective operating sequences;*Undocumented modifications, or changes elsewhere on the site which compromise generator operation;*Obsolete control equipment, often containing limited-life components, which cannot be quickly replaced in the event of failure.*The process of converting your generators for the aggregators operation will flush out and remove the majority of these problems. The risk of a subsequent failure remaining undetected until a mains failure occurs is greatly reduced. Any threat to the generator’s ability to support the site (such as warning signals or low fuel levels) can be remotely detected and reported by the aggregator.*Approximately two-thirds of in-service failures are removed by the type of running which the aggregators operation involves.

9. What about local pollution?

The main types of local pollution from standby diesel generators are:*Noise – modern acoustic enclosures have largely eliminated this problem. *Any remaining noise concerns at specific sites should be addressed early in the process.*Smoke and particulates – off-load testing should be eliminated as it creates stack emissions which are significantly worse than the type of on-load running which the aggregator requires.*NOx and SOx – gas oil (“red diesel”) is now low sulphur. Both NOx and SOx can be minimised on many engines using minor engine adjustments. Manufacturers’ recommendations should be sought.*The amount of annual running is similar to a best-practice test regime, so net local emissions should be no higher as a result of the Demand *Response operation. Using standby generators for Demand Response is a significant reducer of national CO2 emissions which are global rather than local in effect.

10. Will the aggregator take over maintenance, operation or ownership of my generators?

No. We do not supply, install, modify, upgrade, maintain or own generators. Your standby generators remain your assets under your control.If you have a strong, ongoing relationship with high quality contractors in generator maintenance, controls and systems integration, we will be delighted to work with them.

11. Who pays for fuel and maintenance?

You will continue to purchase the fuel and hire maintenance contractors. Your generator(s) remain under your control. These costs are factored into our economic analysis, and the result is a substantial profit for you.

In conclusion:

If you have STANDBY GENERATORS you could generate £40,000+ PA for a 1MW unit.

Utilising your STANBY GENERATING ASSETS will not disrupt your current business

operations.

The financial barriers to entry for you are ZERO.

You will have leveraged an unknown REVENUE STREAM.

and

It will improve your business CARBON FOOTPRINT.

If you are interested in ascertaining just how much your STANBY GENERATORS could generate

you in additional revenue, please do not hesitate to contact either;

Glyn Goodwin - glyn@valeec.com Mobile: 07881824064

Phil.ip.S.Lawrence - phil@valeec.com Mobile: 07748443805

GAS OR BIOMASS/CHP:

Ever thought of generating your own heat and power on site?

Would you like to SAVE up to £30,000 PA on electricity costs?

And SAVE up to £18,000 PA oh heating costs?

Then ask us about BIOMASS/CHP.

We can supply, install and maintain the leading BIOMASS/CHP units on the market,

or,

if CAPEX is an issue, why not ask us about our Fully Funded ESCO model - NO CAPEX and a full

O&M programme for 20 years.

CONTACT: Glyn Goodwin - Mobile: 07881--824064 Glyn@valeenergy.co.uk

Philip.S.Lawrence - phil@valeec.com Mobile 07748443805

If you are interested in any of the above services, please do not hesitate to contact us:

Vale Energy Ltd, Pennant Farm, Prion Road, Denbigh, Denbighshire, LL16 5ST

Telephone: 01745-592182 Mobile: 07881-824064 www.valeenergy.co.uk Email: glyn@valeenergy.co.uk

ValeEC Telephone: 01745-592182 Mobile: 07748443805 www.valeec.com Email: phil@valeec.com

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