There is something incredibly exciting about this year’s “Demand Flexibility Service”.

Now you are immediately thinking “oxymoron”.

You’d be wrong. The Demand Flexibility Service is where the National Grid ESO (Electricity System Operator) is “shaving” demand – that is, paying folk to not consume electricity.

Making money from Battery Storage

If you own a battery storage system, you now have an additional income stream that can enhance your return on investment.

Archy de Berker, co-founder of Axle Energy, wrote a really nice piece about the need for this back in Jan 2023. A key structural problem with the UK’s electricity generation and transmission, is that renewable generation comes from Scotland and the Sea, whilst consumption is heavily focussed in the South of England. It is the classic problem of supply and demand constraints.

The UK is wasting a lot of wind power | Archy de Berker

Archy and his colleague Peter Duffield have even created an app which tells us how much wind power that the UK is discarding due to transmission constraints – known as “curtailment”.

For the first 11 months of 2023, the UK has spent almost £800 million on “curtailment”.

Archy summarises the madness:

Consumers end up effectively paying three times for the power they’re getting: the original payment to the windfarm for the electricity, the payment to turn off, and then the payment to the alternative generator.

Archy de Berker

Axle Energy in action

This is an example of Demand Flexibility in Action. In this instance we have the battery being charged the previous night from the grid and topped up by some roof top solar. Then the battery was discharged on maximum to support the grid.

The beauty of this system is that the software that Axle have developed handles everything. It is fully automated. The system delivers cash to the battery owner’s bank account.

GivEnergy Battery Return on Investment

Bearing in mind this is only in its first year of operation, it is not yet possible to predict how this might play out in the future. If we were to assume that these Demand Flexibility Service events remained at 12 per winter, and it was possible to earn £2.1 per kWh (this is the amount Axle are paying this year), then we might expect to earn £176.4 per winter. Based on a 12 year warranty for a GivEnergy system, we might achieve £2116.80.

Therefore, this has the crude potential to pay about 25% of the capital expense of the system. But we expect things to develop from here. It doesn’t seem unrealistic for 12 events per winter to turn into 50 events per winter. At this level, your system would earn over £700 per year.

And remember, this income stream probably sits on top of your Return on Investment calculations. So whilst here at Brimstone Energy we expect a pay back in the region of 5-6 years, this has the potential to reduce that still further.

Brimstone Energy- Helping you navigate the Green Energy Transition