Be prepared for Triad season

A crucial time in the UK energy calendar, Triad season, begins in just a matter of weeks. The Triad season runs from 1 November to the end of February. Three half hour periods during this phase are used to calculate transmission charges for the entire year by National Grid. This is part of the Transmission Network Use of System (TNUoS) scheme. If your electricity contract allows it, reducing your demand at these specific points will result in lower transmission charges. However, knowing when Triads occur is a complex business.

To help our clients, EIC provides a Triad Alert service. We have successfully forecast each of the three Triad periods for the last 7 years. By predicting Triads each winter, EIC has saved customers millions of pounds in transmission charges.

WHAT ARE TRIADS?

Triads are three half-hour periods with the highest electricity demand between 1 November and 28 February. Each Triad must be separated by at least 10 clear days. This means consecutive days of high demand won’t result in multiple Triads.

A NEW LOW?

The 2018/19 Triad season saw electricity demand fall to a new all-time low. Peak electricity demand for the three half hour periods averaged 45.6 GW, with the third Triad occurring as demand was just 45.0 GW.

By comparison in 2017/18 average demand for the Triads was 47.5 GW. Maximum Triad demand has fallen by over 11 GW (~20%) in the last ten years. This reflects an overall trend towards lower electricity consumption. Major advances in technology and energy efficiency for appliances, as well as a move to smarter lighting are contributing to sustained year-on-year demand reduction.

EIC historic Triad demand graph

This trend provides an opportunity for an even lower Triad figure this year. Weekly peak power demand during 2019 has so far been lower than its equivalent week from 2018 on two-thirds of occasions.

EIC power demand Triad graph

Greater role for wind

Another factor contributing to the decline in demand is the increase in installed wind capacity over the past decade and the increasing share of the fuel mix secured by renewable generation. The latest BEIS figures from Q2 2019 showed renewables capacity rising 8% year-on-year, with its share of the fuel mix reaching new highs of 35.5%.

Most of this capacity is connected to the Grid so does not impact demand. However, around 6 GW (~30%) of wind capacity is embedded – it is connected to local distribution networks. As a result, it can influence outturn demand. Each MW of embedded wind generation is a MW of demand which otherwise would need to be provided by the transmission network. Therefore on days of high wind generation there may be a reduction in demand, triggered by the extra embedded wind levels. Average embedded wind output has increased by more than 1 GW over the past 10 years, contributing to the steady trend in demand reduction.

Last year the level of embedded wind generation varied by 3 GW, depending on nationwide wind conditions. This led to a demand swing of the same amount. This is having a growing influence on Triad forecasting as the increasing demand swing reduces the risk of a Triad occurring on days with high wind output. As a consequence, Triads are more likely to occur on days of very low wind generation. This was the case last year when each Triad occurred on a day with less than 1 GW of embedded wind generation.

HOW MANY MORE TRIADS?

The success of Triad avoidance in reducing costs for the end user has forced regulator Ofgem to undertake a change to the charging methodology for distribution costs. A consultation launched in December 2018 proposed changes which could remove the incentive for Triad Avoidance.

The Targeted Charging Review aims to introduce a charge that Ofgem considers is fair to all consumers and not just those able to reduce consumption during peak periods. Under current proposals, Triads would change to a fixed or agreed capacity, eliminating the need for avoidance in the future. Ofgem originally nominated a deadline for the reforms for April 2020. However, a recently released updated timeline has indicated that the regulator is now aiming for an implementation date of April 2023. As a result, it is possible that there will be a maximum of four winters remaining available for Triad forecasting, including the upcoming season. The removal of the Triad scheme will increase costs for business that currently benefit from Triad avoidance.

EIC TRACK RECORD OF SUCCESS

EIC has an in-house model which has successfully forecast every triad period for the last seven years. We provide clients with comprehensive alerts advising when a Triad is forecast, so they can reduce consumption accordingly.

Our Triad Alert Service forecasts the likelihood of any particular day being a Triad and sends alerts before 10am. This allows businesses to take informed action to avoid high usage during these half-hour periods. It also minimises disruption to their everyday activity. We monitor the market throughout the day and in the event of significant change will send out another alert in the afternoon. The daily report includes foresight of the next 14 days alongside a long-term winter outlook allowing clients to plan ahead.

Calling an alert every weekday would generate a 100% success rate, however we recognise the negative impact this could have on our clients. Organisations would incur major damage to revenues if required to turn down their production each day for 4 months ‘just in case”. At EIC our aim is to provide as few alerts as possible.

Last year we successfully predicted all three half-hour periods. The only tracked TPI or supplier which issued fewer alerts than EIC failed to predict all of the Triad periods.

HOW WE CAN HELP

We have helped hundreds of clients avoid these transmission costs by providing them with the tools needed, giving EIC an enviable track record in Triad prediction.

For those that took action last year, demand was cut by an average of 41% compared to standard winter peak-period half-hour consumption.

This resulted in significant cost savings, with clients who responded to our Triad Alerts saving on average £180,000. The best result last winter saw a client saving just shy of £1 million in TNUoS charges.

The Triad season begins on 1 November. To find out more about our Triad Alert service click here or call 01527 511 757.

The Energy Awards Shortlist Success

Category 1 – Energy Buying Team of the Year

We’re here to simplify the process of buying and managing energy. We match clients with the right contract for their business. The Energy Awards recognised our success in this field and have shortlisted EIC for Energy Buying Team of the Year for our flexible procurement offering.

Flexible Procurement

Our flexible purchasing solutions begin with a strategy development workshop with our clients. We conduct a detailed discussion of the client’s business objectives and appetite for risk, seeking to identify their key priorities for the contract. We also review their current situation and any upcoming projects that could affect their portfolio or consumption.

Public Sector Portfolio

Our Public Sector Portfolio is an OJEU compliant group flexible purchasing solution. It adds value by removing the administrative burden faced by public sector organisations when procuring contracts, and reduces the timeframes when securing their supply agreement. This has proven a real hit with universities, councils and NHS Trusts.

A team effort

There are multiple teams working collaboratively to make the flexible procurement service a success. Our clients are fully supported throughout the procurement process with a dedicated Account Management team. Traders work within the parameters of a client’s strategy making decisions based on insight from our Market Intelligence team.

Trading success

In just one week our flexible procurement traders locked in a massive £343,000 for our flexible procurement clients. In fact in a single month – March 2019 – savings topped £771,000. What’s more, calendar year savings have exceeded a staggering £2.1million for the period January – August.

Category 2 – Energy Data Collection and Analysis

Our shortlist for the Energy Data Collection and Analysis award focuses on our 360 Strategic Energy Review along with our Triad model and alerts.

360 Strategic Review

Our 360 Strategic Review is a powerful data tool created to unearth hidden savings potential for our clients. We take half-hourly data and analyse it on a site-by-site basis. We focus on where reductions in usage can be made and the associated cost savings. It looks at shifting consumption to avoid the peak Distribution Use of System (DUoS) charges, reducing consumption in the winter to mitigate Transmission Network Use of System (TNUoS) charges, and assessing usage against operational hours to identify out of hours wastage. On average we’ve identified savings of £130,639 per customer so far.

Triad model and alerts

National Grid identifies three Triads each year in order to calculate the Transmission Network Use of System (TNUoS) charges an organisation will incur. Such transmission costs can be reduced if demand is decreased when a Triad is expected. Our Triad model and alerts help clients plan their electricity usage around these dates in order to lower their energy bills.

Our model used from 1 November to the end of February,  identifies which days and what time periods on those days could be a Triad. We then inform our clients using our alert service whether they need to take action to reduce demand and avoid a Triad. We have issued an alert on all three Triad dates for the past 7 years. Last year we issued 24 alerts compared to suppliers who had similar results issuing on average 29 alerts. It’s vitally important for us to issue as few alerts as possible to avoid any unnecessary client interventions.

Awards Ceremony

Our teams work really hard every day to ensure our clients get the right solutions for their businesses. It’s great to have been recognised for our efforts. We’re looking forward to the awards ceremony which take place on Thursday 21 November at the London Hilton on Park Lane. We’ll keep you posted on our success.

 

Is the Triad past its peak?

The Triad season has concluded for another year and the three Triad dates, as published by National Grid, are listed in the table below. EIC have once again called an alert on each of these days.

 

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The Triad season runs from the start of November to the end of February every year. In this period, National Grid identifies the three highest half-hour periods of demand. Each Triad needs to be at least ten clear days apart from each other.

These three Triads form the basis of National Grid’s electricity transmission charges. For half-hourly consumers with direct pass-through of transmission costs, these Triad points are of particular importance. If these consumers can predict when the Triads will occur and reduce their demand when they happen then their final transmission costs can be significantly reduced.

 

Demand continues to decline

Total UK winter electricity demand for 2018/19 (Nov-Feb) has declined by 19% since 2009/10 as a result of energy efficiency, demand side management, and warmer weather trends. Consequently, these trends, supported by targeted demand-side management schemes such as the Triad, have created a declining trend in the Triad peak demand and, more recently, a flattening of the profile seen during the peak periods.

Another factor contributing to the decline in demand is the steady increase in installed wind capacity over the past decade. Most of this capacity is connected to the Grid so does not impact demand. However, around 6 GW (~30%) of wind capacity is embedded so is connected to local distribution networks. Embedded wind generation is invisible to National Grid and can instead influence outturn demand. Average embedded wind output has increased by more than 1 GW over the past 10 years which has contributed to the decline in average demand seen in the graph below.

 

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Throughout the past winter embedded wind generation varied by 3 GW, depending on nationwide wind conditions, which led to a demand swing of the same amount. Embedded wind generation is having a growing influence on Triad forecasting as the increasing demand swing reduces the risk of a Triad occurring on days with high wind output. This was demonstrated during the previous winter as all three Triads occurred on days when embedded wind output was less than 1 GW.

 

Errors in National Grid forecasting increase

This winter, National Grid demand forecasts showed a significant error against outturn demand. The graph below shows that across the Triad period National Grid day-ahead forecasts averaged 2.4% higher than demand outturn on 76 days and 1.3% lower than demand outturn on 6 days. Furthermore, on EIC alert days National Grid day-ahead forecasts were 3.6% higher than actual demand levels. This equates to a difference of 1,600 MW which is the equivalent of 2 million microwaves or half a million kettles being used at the same time. In comparison, the average day ahead error for the last Triad period was 1.5%, which shows that uncertainty in forecasting has increased.

 

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Warmer weather trends

Another contributing factor to the fall in peak demand was milder temperatures, with an average UK temperature of 5.7°C this winter. This is higher than the previous winter average of 4.1°C and the 10-year average of 4.7°C. There has only been one milder winter in the past 10 years; in 2015/16 when the average temperature was 6.2°C. The graph below shows the link between low temperatures and high demand. This winter there were only 36 days below seasonal average temperature, whereas last winter there was 61. Nearly half of these days fell within the same cold spell at the end of January so only one Triad fell during this period. This meant there was an increased chance that the remaining two Triad dates would fall on milder days with low wind. This was the case with the Triad on 10th December as the temperature was above seasonal average but wind output was only 1.7 GW.

 

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Demand Side Response

National Grid estimate that demand side response (DSR), where consumers reduce energy usage during peak times, can lower national demand by up to 2 GW. The impact of DSR is typically larger during periods of cold weather and when all suppliers have issued a Triad warning. However, as we have seen from the December Triad, a lower level of demand response on milder days can inadvertently increase the risk of that day being a Triad.

The implementation of DSR has also affected the timing of the peak demand period. The graph below shows that the evening peak on Triad alert days was both longer and flatter than on non-alert days. When EIC issued a Red or Amber alert the evening peak typically lasted from 4pm to 8pm and was 4 GW higher (~10% increase) than afternoon demand (12pm to 2pm). Whereas on Green alert days the evening peak occurred between 5pm and 7pm and was 5.7 GW higher than afternoon demand (~15% increase). This suggests that a large number of businesses are reacting to Triad alerts by reducing demand during the typical evening peak.

 

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The flattening of the evening peak on Triad alert days created problems with several suppliers’ Triad forecasts. The table below shows that six large suppliers all incorrectly predicted the peak time period on a number of occasions. For example, on 3rd January all six suppliers in the table below recommended reducing demand at some point between 4:30pm and 7pm. However, the peak half-hourly period fell between 4pm and 4:30pm before many businesses started to reduce demand. EIC managed to correctly predict the timing of the peak half-hourly period for all 24 of the alerts issued, eliminating the risk to our customers of reducing demand at the wrong time and potentially missing a Triad.

 

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Uncertain future for Triads

As a result of the success of the Triad scheme in reducing peak demand as well as other fundamental changes to supply and demand, we have now reached a point where Ofgem are considering a different charging methodology. The Targeted Charging Review aims to introduce a charge that Ofgem consider is fair to all consumers and not just those able to reduce consumption during peak periods. Ofgem’s preferred option is for a fixed charge, however there is also the potential for a capacity based charge.

It is possible that next winter will be the last for Triad forecasting although at this point no timescales have been confirmed. The removal of the Triad scheme will increase costs for many business that currently benefit from Triad avoidance. An innovative way for these businesses to reduce future electricity costs is to invest in on-site generation and Intelligent Buildings solutions. EIC can help with this.

 

Next Steps

As the Triad dates have been confirmed for the 2018/19 season we are now able to calculate your Transmission costs for the next year. This forms part of our 360 Strategic Review which is the ideal first step to creating a Strategic Energy Solution for your business. It is key to unearthing hidden savings potential within your business. We’re offering businesses this insight for FREE. Claim yours here https://hubs.ly/H0gG7j20

 

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Our IoT-enabled Intelligent Buildings solution brings together the required technologies to integrate your critical energy systems with a single, remotely-managed platform. This means you can manage your buildings in real time, reacting to Triad alerts, saving valuable time, money, and hassle. Find out more here https://hubs.ly/H0gYtTJ0

Triads – how low can they go?

The Triad season started on 1 November and is one of the most important areas of demand management for energy users. Triads are used by National Grid to calculate transmission charges as part of the Transmission Network Use of System (TNUoS) scheme.

What are Triads?

Triads are the three half-hour periods with the highest demand between 1 November and the end of February, identified by National Grid. However, each Triad must be separated by at least 10 clear days, meaning consecutive days of high demand won’t result in multiple Triads.

 

Why should you avoid them?

The knowledge of when Triads will occur enables many companies to manage their demand consumption. If your electricity contract allows for it, reducing your usage during an expected Triad period will result in reduced transmission charges and lower bills.

 

How low can they go?

The 2017/18 season saw the lowest level of Triad demand since records began in the early 1990s.

The maximum Triad level dropped to a record 48GW last year, having fallen more than 10GW in just eight years.

 

How low can Triads go

 

Overall energy consumption has been trending lower for the last decade, and one of the interesting outcomes from this Triad season will be whether a new record low can be achieved.

 

Efficiency is key

A large part of the reduction in peak demand has been due to major developments in energy efficiency. The use of new technology and appliances, as well as a switch from incandescent lighting, are all contributing to lower energy consumption.

The act of Triad avoidance has developed to the extent that it’s influencing when Triads occur, as more and more businesses across the UK look to demand side management as a means to cut their costs. National Grid highlighted last year that businesses reacting to warning signals – such as our Triad Alerts – had the potential to cut the country’s peak demand by as much as 2GW. This then makes it more difficult to predict Triads, as peaks for the winter get lower and flatter with each passing year, forcing us to adapt our model to ensure continued success.

 

Our successful track record

Forecasting Triads is dependent on a wide range of different factors. Our Triad Alert service monitors different influencers to predict the likelihood of any particular day being a Triad and automatically sends that information promptly to our clients. These businesses can then take informed action to avoid high energy usage during these more costly half-hour periods, while minimising disruption to their everyday activity. Our daily report can help you plan ahead with an overview of the next 14 days, alongside a long-term winter outlook.

Of course, calling an alert every weekday would generate a 100% success rate, but we recognise the negative impact this would have on businesses. Organisations could incur major damage to revenues if required to turn down their production each day for four months ‘just in case’, so we aim to provide as few alerts as possible.

In the previous Triad season we only called 9 Red Alerts and successfully predicted all three Triads with fewer alerts than any other tracked TPI or supplier. In fact, the total number of alerts called by Utilitywise has fallen 36% in the last three years. We successfully predicted all three half hour periods with our lowest ever number of alerts. Our in-house model is based on a traffic light system, with Red Alerts indicating we believe a Triad is highly likely and our clients should take immediate action.

For those that took action last year, based on our advice, demand was cut by an average of 14% compared to standard winter peak-period half-hour consumption. This resulted in significant average cost savings of over £30,000, and in some cases, rewards closer to £700,000 were observed.

 

Intelligent buildings, smarter business

By forecasting when Triads will occur, we empower our clients to take control of their consumption to reduce their energy use and lower their bills. Businesses can react to our Alerts simply by cutting demand during suspected Triad times or by load-shifting.

Load-shifting involves moving the most energy-intensive tasks of the day to a time when it’s less likely that a Triad will occur, for example early in the morning. This enables you to avoid Triads without reducing your overall daily energy use. Building controls make this easier. With our IoT-enabled Building Energy Management solution, we’re introducing the next generation of smart building controls. Our innovative solution brings together the required technologies to integrate your critical energy systems with a single, remotely-managed platform. This means you can manage your buildings in real-time.

A smarter way to avoid Triads

Each year from November to the end of February, National Grid use peak demand data to calculate how much energy users should pay in electricity transmission charges as part of the Transmission Network Use of System (TNUoS) scheme. To avoid higher costs you can undertake Triad avoidance.

What are Triads?

Triads are the three half-hour periods with the highest demand between 1 November and the end of February, identified by National Grid. Each Triad must be separated by at least 10 days. This means consecutive days of high demand won’t result in multiple Triads. Businesses that reduce their usage during these high demand points will lower their future electricity transmission costs.

You can find out if your business is affected by Triads here.

 

How will you know when to act?

Our Triad Alert Service monitors different influencers to predict the likelihood of any particular day being a Triad and automatically sends that information promptly to our clients. You can then take informed action to avoid high usage during these more costly half-hour periods, while minimising disruption to your everyday activity. Our daily report can help you plan ahead with an overview of the next 14 days alongside a long-term winter outlook.

Find out more about our Triad Alert service here.

 

We’ve got a Triad and tested track record

Predicting Triads is very challenging; falling demand and changing usage patterns mean Triads are no longer guaranteed to occur at the height of winter. Season 2017/18 included the latest Triad on record and weakest demand levels since the early 1990s.

We’ve helped hundreds of clients avoid these transmission costs by providing them with the tools needed, giving EIC an enviable track record in Triad prediction. Previously, one client saved £800,000 by acting on insight from our Triad Alert service.

Last season we hit all three Triad periods, issuing just nine red alerts, lower than any other TPI or supplier – a testament to our in-house technology, analytics, and expertise. Of course, calling an alert every weekday would generate a 100% success rate but we recognise the negative impact this would have. Businesses could incur major damage to their revenues if required to turn down production each day for a quarter of the year ‘just in case’.

By issuing fewer alerts we ensure our clients are not unnecessarily disrupted from their day-to-day activities. Those that took action in response to our alerts last season cut demand by an average of 15% compared to standard peak-period half-hour consumption.

 

Intelligent buildings, smarter business

By forecasting when Triads will occur, we empower our clients to take control of their consumption to reduce their energy use and lower their bills. Businesses can react to our Alerts simply by cutting demand during suspected Triad times or by load-shifting.

Load-shifting involves moving the most energy-intensive tasks of the day to a time when it’s less likely that a Triad will occur, for example early in the morning. This enables you to avoid Triads without reducing your overall daily energy use. Building controls make this easier. With our IoT-enabled Building Energy Management solution, we’re introducing the next generation of smart building controls. Our innovative solution brings together the required technologies to integrate your critical energy systems with a single, remotely-managed platform. This means you can manage your buildings in real-time.

The Triad season begins on 1 November. To find out more about our Triad Alert service click here call 01527 511 757 or email info@eic.co.uk.