COMPANIES WITH ONSITE GENERATION ASSETS ADVISED TO ‘OFFSET’ THEIR ELECTRICITY CONSUMPTION TO MAXIMISE OVERALL RETURNS

EnDCo opens its Offset Supply service to new customers with onsite energy generation capacity

Companies with onsite generation should look to ‘offset’ any exportable energy they produce against the energy they purchase elsewhere in order to improve their overall energy portfolio returns.

This is the advice being provided by EnDCo, an independent licensed electricity supplier that provides business customers with direct access to the wholesale electricity markets. The company says that six-figure annual savings can be achieved for businesses with the right ratio of electricity consumption to generation that adopt the Offset Supply strategy, even at exported power levels as low as 1.5 megawatts (MW).

Andy Rice, managing director of EnDCo explains: “For companies that can generate electricity, either at a single site or at multiple locations, a strategy for ‘offsetting’ any surplus generated power against the electricity consumption needed at other geographically dispersed premises can be a very attractive option. Furthermore, using this approach companies with an energy-generating plant in Scotland and an energy-consuming operation in Cornwall don’t need an extension lead connecting the two locations to make this happen.’

An offsetting approach is one which works best when a business operating at multiple premises is in a position to meet most of their electrical load from their own generation sources, or even better when that generation capacity exceeds the consumption requirement. The generation asset/s may be located at a single site or dispersed over multiple locations, but in either event the generated power can be used to offset the consumption at any number of other power-consuming properties.

In these circumstances, EnDCo enters into an agreement with the customer to allow all of its consumption to be offset by its own-generation. If there is any residual generation after consumption needs are met, this would be sold into the wholesale market or conversely, if there is insufficient generation to meet consumption for any particular period, then additional power would be purchased to make up the shortfall.

The terms on which power is sold into, or bought from, the market in the event of a surplus/shortfall are open to negotiation, but a typical approach would be to sell or buy any known (forecast) surplus/shortfall at prevailing market prices with any residual requirement taken at the published System Prices. Provision by the customer of accurate forecasts (for example, on a week-ahead basis) is a critical and integral part of the agreed service package.

EnDCo is able to provide an offsetting service to its customers because it is not seeking to make a margin on either the purchase or sale of electricity. EnDCo fees are simply applied as a fixed monthly charge, which is independent of the power volumes imported or exported, although this does of course need to be taken into account in assessing the total net benefit.

Market sectors which EnDCo believes can most benefit from its Offset Supply service include manufacturing, Energy from Waste recycling plants, onshore oil and gas extraction and even public sector organisations such as hospital trusts which can have large capacity onsite generating CHP and biomass plants.

Information about the Offset Supply service can be found on the EnDCo website at: http://www.endco.co.uk