At periods of peak electricity demand, the electricity grid comes under strain. Some of the most expensive power plants turn on to meet this demand. What if instead of turning these expensive power plants on we reduce peak load?
This is the idea behind the Electricity System Operator's (ESO's) Demand Flexibility Service. When Loop’s users use less electricity during Turn Down and Save events, the ESO pays Loop for reducing the cost of running the grid. Loop passes this on to our customers based on how much they reduced their use.
How does Loop calculate your reduction in usage?
Loop’s calculations follow the industry standard. This is prescribed by the ESO.
The idea is to use your historic smart meter data to estimate how you typically use electricity at the time of the Turn Down and Save event. This typical usage is called your “baseline”. For example, if a Turn Down and Save event is from 5pm to 6pm on a Monday, the calculation looks at how you’ve used electricity between 5pm and 6pm on the previous 10 days (excluding bank holidays and days with Turn Down and Save events) to calculate your baseline.
This sounds simple enough. Yet, the methodology then adds in one extra complications.
Half-hourly timescales
The electricity system runs on half-hourly timescales. A one-hour Turn Down and Save event covers two half-hour blocks. The ESO has decided to calculate savings per half-hour, then add up to get to total savings. So rather than calculating a single baseline for an hour-long Turn Down and Save event, we calculate one for each half-hour.
For example, suppose a user’s baseline is 1kWh for both the first and second half-hours of an event. If they use 0kWh in the first half-hour and 2kWh in the second half-hour then overall they’ve not reduced their usage. But because the savings are calculated half-hourly, they are rewarded for the 1kWh saved in the first half-hour.
This decision makes communicating savings more difficult. However, by splitting the calculation up, it means that customers who only reduce their usage in a single half hour still get rewarded.