In the UK, manufacturers can unlock new streams of revenue by leveraging an often-overlooked energy programme. The Capacity Market presents the key to both energy efficiency and profitability.
Introduced as part of the UK Electricity Market Reform (EMR), the Capacity Market is designed to ensure that the country has sufficient electricity supplies to meet future peak demand. By offering payments to businesses for contributing to grid stability, it acts as an ‘insurance policy’ against power outages, which are becoming more likely as renewable energy generation grows faster than grid infrastructure upgrades.
Empowering manufacturers for the future
Participating in the Capacity Market is aimed at businesses with energy intensive processes. Manufacturing processes across many sectors consume substantial electricity for their operations, and manufacturers already own energy assets and equipment that can provide essential capacity for the UK’s power system simply by being turned down or off at times of need.
National Grid will pay businesses up to £65,000 for every megawatt (MW) that they enrol in the Capacity Market for future years.
Simplifying participation in the capacity market
Participating in the Capacity Market can take up a lot of resource for a business trying to go it alone. The application process is complex and there are stringent rules of engagement with financial penalties for not meeting commitments. These may seem off-putting, but with expert help from energy aggregators, participation practically takes care of itself.
For one food manufacturer that has participated in the Capacity Market since 2020, Enel X has removed the complexity entirely. Enel X manages their entry to the scheme from compliance, data analysis and testing to the submissions to the Electricity Market Reform Settlement body. The firm has gone on to generate over £1.25 million in revenue and unlock a consistent stream of new income every year.
Minimum disruption, maximum value
Operational disruption, often seen as a barrier to participation, is not an option for many businesses. While the Capacity Market presents the most stable, lowest risk demand-side response programme, it still requires careful planning and forecasting to give organisations greater control over their response to grid events. Expert participation management helps firms maintain focus on their core business, without being sidetracked into time-consuming energy management activities.
A regional agricultural feeds manufacturer has seen the ease of taking part as a significant benefit, allowing them to focus on farming and production. The energy market offers an additional revenue stream and reduces their overall energy costs. It also presents a way to encourage the use of renewable energy and reduce emissions.
Start your energy market journey today
Participating in the Capacity Market is lucrative, tried and tested, and surprisingly low effort. The market may be 10 years old, but it is reliable and low risk. Most manufacturers already have the tools and infrastructure to participate in the Capacity Market but may find the process daunting. That’s where an experienced energy aggregator like Enel X offers valuable support.
To make Capacity Market and energy flexibility part of your energy strategy, get in touch with Enel X at https://www.enelx.com/uk/en/contact-us
Wayne Davies
, Head of Flexibility UK & Ireland at Enel X, helps businesses participate in the Capacity Market and other energy flexibility markets, meeting regulatory compliance and securing extra revenue.
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