What is changing in the electricity system? And how is it creating trading opportunities?

How is the electricity system changing?

In this short guide, we’ll be talking about the electricity system changes we’re seeing at Wattstor. Cheaper renewable energy assets and battery storage, together with an increased uptake of EVs, is changing the electricity system and creating new opportunities for industrial and commercial (I&C) organisations.

The catalysts for new trading opportunities:

  • Cheaper renewable assets
  • Increased EV uptake

Why price volatility is increasing

A renewables-driven electricity system is, by its very nature, prone to energy price volatility. This is because the wholesale electricity prices will be determined, among other factors, by how much solar and wind energy can be generated based on current and future weather conditions. Another factor that plays a major role in electricity system changes is electricity demand. For example, demand tends to vary depending on the season and the day of the week.

This combination of factors means that prices can fluctuate significantly within a short period of time. For example, on January 1st, 2022, prices went from -£50/MWh – which means that users on dynamic tariffs were actually paid to consume electricity – to £200/MWh, which is considered very expensive.

How I&C organisations can benefit from price volatility

As the percentage of renewable energy in our power mix increases, we can expect price volatility to increase too. However, this is not necessarily a bad thing for I&C organisations. 

With the right technology and insights in place, organisations can buy electricity at low prices and sell it at high prices – cutting costs while increasing their profits on exports to the grid. But this is only possible when there is visibility on market trends, and an ability to predict future price fluctuations.

That’s why Wattstor has developed our sophisticated energy management system (EMS): Podium. Podium connects to all onsite energy assets (including renewable generation assets, batteries, EVs and more) and optimises the way electricity is generated, consumed, stored and sold, taking into account market conditions. 

In this way, organisations can maximise profits from onsite generation assets, cut their electricity bills, and reduce their Scope 2 emissions through:

  • Consuming onsite-generated renewable electricity
  • Load shifting
  • Avoiding non-commodity costs (DUoS, CMSC, Triads)
  • Selling electricity to the grid at peak times

By intelligently forecasting market conditions and onsite demand, Podium allows a typical I&C site to reduce net costs by 33-66%. In this way, price volatility can be turned from a headache to a strategic opportunity, allowing organisations to cut costs while playing their part for a more sustainable future. 

If you’d like to know more about smart electricity management for your I&C site, get in touch with the Wattstor team for a free discovery meeting. 

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