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Embedded Generation

Written by

Chris Broadhurst, ENSEK | Head of Sales & Marketing

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An Alternative Business Model

Embedded generation is a growing feature of the market and an increasing proportion of the generation mix; sourcing from embedded generation is attractive to suppliers wanting to enter the sector as a green supplier and also because of the incentives offered by the industry to recognise the value of locally sourced energy.

For suppliers with embedded generation assets in their portfolio, it can be difficult to account for, or validate the charges and credits received by you from the industry, and in turn the credits you pay out to your generators where agreed in a PPA. So what can be done?

Typically, the embedded generators themselves are usually individuals without the resources or expertise to manage the quality of their generation data. Indeed the BSC obliges suppliers to manage settlement data on behalf of embedded generators with whom they’ve contracted. Analysing and evaluating this generation data can be a time consuming and highly manual task, which makes any meaningful validation exercises costly from the outset.

Using our industry leading energy data reconciliation engine, Libra, we’re able to piece this information back together intelligently to calculate, right down to the HH, the benefit that embedded generation is providing to your overall portfolio. A great method to routinely assess the effectiveness of this business model.

Through a detailed analysis and evaluation of your export generation, we can identify and validate independently;

Transmission Charges – Non Half Hourly Demand

  • With embedded generation capacity, you’re able to net off any generation volumes against supply volumes in the local region, for the simple reason that where power is generated and distributed locally via the DNO, the transmission network isn’t used.

Transmission Charges – Half Hourly Export

  • Half hourly metered generation attracts significant credits to recognise the alleviation of demand on transmission network

Distribution Charges

  • Distribution Network Operators pay out credits based on embedded generation on their network.

Trading Imbalance Charges

  • Reduced due to the netting effect of generation and supply volumes at a regional level – only the net volume is settled at cash out prices.

Balancing Charges

  • Similar to mitigation of transmission charges and trading imbalance charges, embedded generation also reduces BSUoS and RCRC by distributing its power locally, therefore reducing impact on the national grid.

Enhanced visibility and insight into your embedded generation sourcing delivers great control over your portfolio, giving you the ability to analyse performance by region, and ensure that you can maximise the benefits associated through the avoidance of Transmission/Balancing charges and DNO credits.

Similar to other charges, it can be difficult to independently validate the invoices received from the industry – our analysis gives you an impartial view, ensuring that the costs you pay, and pay out, are accurate and reflective of your portfolio’s consumption and generation.

Interested? Get in touch.