Over 50% of the costs on electricity invoices are for industry charges that cover things like transport and distribution costs. These costs are known as non-commodity costs.
The energy market is complex and large users of electricity generally have meters that measure their electricity consumption on a half-hourly basis. How much they pay for their non-commodity costs is determined, in part, by their demand during 3 half-hours of highest demand on the electricity transmission system between November and February each year. These are known as ‘Triad’ periods.
By reducing their consumption over the Triad periods, large users of electricity are able to significantly reduce their electricity charges.
By using the Crown Commercial Service (CCS) agreements for half-hourly electricity and demand side response, customers receive notice of when these Triad periods may occur so they can take action to reduce their consumption or switch to standby generation.
This can lead to substantial savings on transmission charges and across the NHS potential savings of £1.5 million have been identified.
Royal United Hospitals Bath NHS Foundation Trust has pioneered Triad management within the NHS. They were already using demand side response, via Flexitricity, and transferred to the CCS demand side response agreement as it enabled them to remain with the supplier but take advantage of enhanced terms and conditions, which provided them with better savings compared to what they could negotiate as an individual trust.
With ongoing support and advice from CCS and the supplier, the team at the trust has been successful in minimising the impact of transmission charges.
By using remote start support from Flexitricity to switch generation equipment at likely Triad periods, they have been able to use both their on-site generating capacity and Combined Heat and Power units to reduce their energy consumption from the national grid at key critical times.
Knowing when the expected Triad periods are likely to be and being able to take action has saved the trust over £78,000 on their electricity costs during 2014/15, and they expect to see similar, if not higher, savings in 2015/16 and beyond.
The trust is also proactively looking at other ways to maximise their energy savings potential via the CCS agreements. For example, through the Government’s Electricity Demand Reduction scheme, which is designed to support the national grid to balance the supply and demand for electricity across the network.
The CCS energy team is committed to powering the public sector - helping our customers across central government, the NHS and the wider public sector save millions of pound each year. Our combined buying power and commercial innovation helps you get best value in buying gas, electricity and liquid fuels. We can also help you save even more by reducing your consumption and future proofing your buildings.
If you are not yet using a CCS energy agreement get in touch today to discuss the options available to you by emailing EHNEnergy@crowncommercial.gov.uk or calling 0345 410 2222.