The cost of energy storage has been declining for the last 20 years. And as prices on power storage batteries have dropped, the option to introduce energy arbitrage as a cost savings method has become increasingly realistic for many industrial and commercial consumers.
Energy arbitrage is the practice of purchasing and storing electricity during off-peak times, and then utilizing that stored power during periods when electricity prices are the highest. There are several benefits to introducing an energy arbitrage strategy, particularly in Ontario’s energy market, where industrial electricity rates rose 16% between 2013 and 2015 alone.
Benefits of Energy Arbitrage
1) Coincidental Peak Avoidance
Energy arbitrage enables the user to avoid drawing power from the grid during periods of peak demand, when prices are the highest. Instead, power is drawn and stored at night, to be reintroduced as needed. Many grid operators offer financial incentives for consumers who reduce demand on the grid during peak periods. Energy arbitrage qualifies the user to receive these incentives.
2) Lower GA
The Global Adjustment charge is calculated based on the consumer’s electricity usage. The more electricity the user takes from the grid during peak periods, the higher the cost of the electricity, and in turn, the higher the GA charge. Energy arbitrage lowers use during peak periods, in turn reducing the GA fee.
3) Sell Back to the Grid
In many cases, electricity saving during low-demand periods creates a surplus of high quality power. Energy arbitrage participants have the ability to sell this excess power back to the grid, instantly adding value to the bottom line.
4) Increase Power Quality
Particularly during high demand periods, power quality can be inconsistent at best. For consumers at the whim of the grid, the delays associated with loss of power during a work day can represent significant dips in productivity and accuracy. Energy arbitrage provides back-up power that can eliminate the risk of costly delays.
5) Environmental Sustainability
Though the government offers incentives for consumers willing to construct CHP plants for power generation, CHP is not the most environmentally sound option. CHP plants still rely on fossil fuels, and their construction creates a large carbon footprint. Power storage technology, on the other hand, is far easier to install, and therefore leaves a smaller footprint. And since power is simply being taken from the grid, it requires no further fossil fuels to produce high quality electricity.
Energy Storage as a Service (ESaaS)
In the past, some consumers have been hesitant to introduce grid storage systems because of the cost and operational requirements necessary to install, implement, and maintain the program. Constant Power’s Energy Storage as a Service (ESaaS) was specifically created to eliminate these concerns, making grid battery storage a widely accessible solution that cuts energy spend without any capital outlay or technology risks.
Constant Power handles all design, installation, insurance, ongoing operation, and financing of the ESaaS program. ESaaS customers receive all the benefits of energy arbitrage, for an affordable, fixed monthly cost. Generally speaking, this equates to a 50% reduction in annual electricity spend! Additionally, ESaaS ensures that the user receives reliable, high quality power even when the grid experiences interruptions. It’s a simple, affordable way to cash in on all the cost savings that an energy arbitrage strategy has to offer.
Contact the Constant Power team today to learn more about how ESaaS can help you implement an energy arbitrage practice within your facility.