Business-critical issues of disrupted power supply, coupled with ever-increasing energy costs, require long-term strategic investment as well as short-term management.
Since data centres were not included in the Government’s latest Energy and Trade Intensive Industries (ETII) scheme, times are, arguably, even tougher for this sector.
The current energy crisis is not a one-off, and the transition to renewables involves seismic shifts in the way we produce and distribute energy. Tight supply margins, coupled with the inflexibility of renewable power generation as we move further to net zero, increase the potential for disruption to the National Grid and to energy supply across the UK – with data centres left particularly vulnerable. The shift to greener energy production and usage will only continue to exacerbate this, with the Climate Change Committee predicting a 50% rise in electricity demand by 2035.
Traditionally, an Uninterruptible Power Supply (UPS) has been an effective solution to protect specific critical pieces of equipment and vital data in the event of power disruption, so long as the UPS is properly maintained. However, this option is becoming increasingly untenable given the costs involved – both the financial cost of wasted energy and the negative impact this wastage has for sustainability targets.
Most of the time, a UPS will be sitting idle yet still consuming significant amounts of energy as it switches constantly between AC and DC, leading to a capacity loss of between 10 and 15%. Many businesses are replacing outdated UPS with modern BESS technology, which has far lower losses of only around 1%. At the heart of a smart microgrid, a BESS offers site-wide security in the event of power disruption, while offering additional commercial benefits to help offset energy price rises.
A solution in practice
It was in this context – the need for a secure and reliable power source in the event of disruption to grid supply and tighter budgetary constraints – that South Staffordshire Council approached Powerstar to advise on an alternative to their existing UPS. Like most public sector organisations and data centres across all industries, councils hold and maintain large amounts of personal and sensitive information, meaning that security of energy supply is critical, for day-to-day business operations and given the legal and reputational imperatives.
In addition to protection of data, the council wanted to maximise the ROI on their on-site 100 kW solar array, requiring the capacity to both store renewable energy generated and to have the facility to sell this energy to the grid. Given these demands, Powerstar recommended replacing the outdated UPS with modern BESS technology.
For South Staffordshire, Powerstar installed a 250 kW BESS which provides full, site-wide UPS while also enabling the council to store excess solar power for use when needed, maximising its output, and enabling the council to export energy at the most beneficial time.
Management of this export is critical, to avoid a scenario where agreed export capacity could be exceeded, thereby eliminating the risk of penalties from the grid. In terms of the most critical aspect of the BESS – the ability to protect energy supply during disruption – the new system protected the council’s site from five blackouts last year alone and provided sitewide resilience for 2.5 hours at peak load. In one such outage, a drop in voltage to 0 occurred, during a transient power cut for a duration of around three minutes. The full load for the site was supported during this incident, preventing any loss of power, and keeping all electrical equipment, including IT systems and servers, running as normal. This security of supply meant that the council could lose its carbon-intensive backup generator, removing an energy-intensive and now redundant asset.
In the current energy crisis and given the lack of financial support for data centres as a standalone sector, the capability to generate new revenue while maintaining control over energy demand presents a compelling case for the switch to BESS technology. For South Staffordshire Council, this has meant the ability to store their solar energy. For a sector as energy intensive as data centres, generally, the flexibility of BESS – which can draw electricity down from the grid rapidly when prices are low and release it back when overall demand is high – can allow companies to capitalise on revenue potential while helping to balance the country’s power supply.
Generating revenue
With renewable energy growing as an overall percentage of supply, the grid faces more intense pressure in managing increasingly distributed power generation and in balancing supply against demand. While Demand Side Response (DSR) is well-known as a means to both generate revenue and to help balance grid supply through releasing surplus energy when required, the most lucrative option – Firm Frequency Response (FFR) – can prove challenging for businesses looking to engage with grid balancing. And this is where BESS comes into its own.
To qualify for FFR, with its real-time imperative, companies must be able to respond to frequency changes within a maximum of 30 seconds and need to successfully complete a pre-qualification assessment and sign a framework agreement prior to tendering for the National Grid’s monthly contracts.
A successful tender allows the grid to call upon these pre-approved assets to either reduce demand or to increase power generation when needed to maintain grid frequency and help avoid outages. Of the two types of FFR – static and dynamic – the dynamic option offers the highest revenue potential to contracted companies, but companies engaged in FFR receive payment for the availability of their assets even if they are never called upon for standby grid balancing.
While static FFR requires participants to reduce consumption for half an hour should there be a significant drop in frequency, dynamic FFR manages much smaller variations and responses need to begin within a couple of seconds, with participants either reducing or increasing consumption from a few seconds up to several minutes, depending on the grid’s requirements. In this scenario, the instantaneous nature of BESS technology makes it an ideal asset for dynamic FFR.
While revenue generated from balancing services may no longer be sufficient as the primary justification for investment in BESS, the nature of payments for participation can help businesses to forecast new revenue, as they are usually split into two components: an Availability Fee, based on the number of hours a provider is available, whether needed or not – and thus a fixed and known income – and a Nomination Fee, which is a separate payment calculated on actual asset usage.
That said, and as the current economic and geopolitical climate demonstrates, the most pressing reason to invest in BESS is the business-critical demand for security of power supply, coupled with the need for flexible, efficient, and cost-effective management of energy budgets.
For South Staffordshire Council, their switch from outdated UPS to BESS provides this vital security, maximises the potential of renewable assets, and offers the option to generate revenue to help offset energy price rises. In the context of the energy trilemma – affordable, sustainable, and reliable power – Battery Energy Storage Systems represent a sensible investment for most sectors and, arguably, can be seen as critical assets in a data-driven, energy-intensive environment.
