Tag: customers

‘3D’ to drive an energy revolution

Jonathan Kini, CEO Customers

1 February 2019

Opinion

Think of the phrase ‘3D’ and may people instantly think of video games, television or cinema, along with the special glasses you needed to watch it.

But another form of 3D is, I believe, going to be at the heart of the energy revolution which is rapidly gathering place.

The three Ds in this case are Data, Diversification and Decarbonisation. Together, they will transform the way businesses buy, use and sell their energy, help companies take control of their energy use and save money and also play a key part in our journey towards a zero carbon, lower cost energy future.

We’re already seeing some real innovations in the energy sector. Our trial of a storage battery with a customer of Opus Energy is an example, offering a farming business in Northampton the chance to sell stored energy generated by solar panels back to the grid at times of peak demand – a potential new revenue stream.

But other innovations and advances will maintain the pace of change and data will be at the core of this now the new generation of smart meters are being installed in businesses, revolutionising customer relationships with their energy suppliers.

The data from the new meters will finally give customers insight into where and when they use energy. Suppliers will have to work much more closely with customers to help them access new opportunities for cost savings, access to new markets and even new revenue streams.

An example would be a restaurant. With the data smart meters will provide, the restaurant’s supplier will be able to tell the owners how their energy use compares to the local competition and where improvements can be made.

The detail could go as far as identifying whether the restaurant’s equipment is older and less efficient, whether rivals have installed newer kit or whether other businesses are switching off their equipment earlier or using it at different, cheaper times.

Using energy during the peak weekday morning and early evening hours is often the most expensive time to do so. Data will give businesses the insight into how they can use energy more efficiently and when they use it, offering them the chance to avoid buying at peak times whenever possible and driving efficiencies.

This is why Haven Power’s trading team is now working closely with GridBeyond. The partnership allows our customers to trade the power they produce as well as optimise their operations to help balance the grid at times of peak demand. The really smart thing is that in doing so, customers are reducing their energy costs and making their operations more sustainable.

Trading desks at Haven Power’s Ipswich HQ

The way demand changes and is managed by businesses and consumers on a diversified power system will also be key. The business energy sector is already diversifying as many customers are able to generate and store their own power but the next step is for more customers to be paid to reduce their usage at peak times.

Think of a busy time for the National Grid – half time in the FA Cup Final or after the results in Strictly Come Dancing. Previously, the grid would have to pay a power station to ramp up generation to meet demand but these days, customers are paid to reduce demand for 30 minutes or so – in effect becoming a huge virtual power station.

This has happened for some time of course with larger, industrial customers but now, smaller companies can benefit from this too, thanks to the data and insight they will have from their smart meters. This empowers customers and puts them, not the energy companies, in control of the key decisions about their energy.

A close, advisory relationship between energy suppliers and their customers will become ever more important to make sure business can choose to avoid the high demand periods, and maximises use during the lower, cheaper times. In fact, I can see a time when customers will end up paying more for insight and advice than they do for the power they buy – and they’ll save money overall in doing so.

And if we get all this right, it will help drive one of the most important of the three Ds – decarbonisation.

Sustainability is increasingly becoming a primary focus for businesses and demand for renewable energy is growing because it is now cost-effective. That will help us in our drive towards a zero carbon future as more and more renewable energy comes onstream, though the UK will continue to need power generated from more flexible assets as well.

So there are huge opportunities out there to transform our energy landscape but they have to be viewed positively. The smart metering programme can be viewed as a regulatory burden or it can be seen as an opportunity. We take the positive view.

Likewise, batteries were once the preserve of massive companies only but now, as technology develops, they are becoming available for smaller firms too. The more we can innovative on a larger scale, the more the technology will work its way into smaller markets too, adding momentum to the energy revolution.

The opportunities are huge. If we get it right, so too will be the benefits to one of the biggest priorities of all – the work to decarbonise the UK and create the lower carbon future we all want.

Building a sustainable business

Will Gardiner, Chief Executive Officer, Drax Group

21 March 2018

Opinion

The UK energy sector is changing rapidly. The boundaries between users, suppliers and generators are blurring as energy users are choosing to generate their own energy and are managing their energy use more proactively while, conversely, generators are increasingly seeing users as potential sources of generation and providers of demand management.

“The UK is undergoing an unprecedented energy revolution with electricity at its heart – a transition to a low-carbon society requiring new energy solutions for power generation, heating, transport and the wider economy”

In that context, our Group’s purpose is to help change the way energy is generated, supplied and used for a better future. This means that sustainability, in its broadest sense, must be at the very core of what we do. Successful delivery of our purpose depends on all our people, across all our businesses, doing the right thing, every day. With the right products and services, we can go even further and help our customers make the right, sustainable energy choices.

As our businesses transform and we embrace a larger customer base, different generation technologies and operate internationally, the range of sustainability issues we face is widening and becoming more complex. At the same time, the range of stakeholders looking to Drax for responsible leadership on sustainability is increasing. The need for transparency is greater than ever, so our website’s sustainability section provides a comprehensive insight into the Group’s environmental, social and governance management and performance during 2017.

Some of the highlights include:

Carbon reduction: I am pleased that, in 2017, the proportion of our energy generation from renewable sources remained high. 65% of our generation during the year came from sustainable biomass and accounted for 15% of the country’s overall renewable generation. We maintained our rigorous and robust approach to ensure that we only ever use biomass that is sustainably produced and legally sourced.
People: Another key achievement was the roll out of our people strategy to 2020 – One Drax – which focuses on talent to deliver on our strategic and operational objectives.
Safety: The health and safety of all our employees and contractors is of paramount importance to Drax. While the Group’s safety incident rate remained on target in 2017, the fire at our biomass rail unloading facilities in December did cause an outage, with disruption lasting into 2018. It highlighted once again that the risks of generating using biomass must be mitigated through robust safety procedures and a risk-based plant investment and maintenance programme. Safety therefore remains at the centre of our operational philosophy and we are determined to do even better.
Customers: Our business to business (B2B) Energy Supply business received recognition for their dedication to customer service. Opus Energy won “Utilities Provider of the Year” at the British Small Business Awards 2017.

We initiated a process which would allow us to participate in the United Nations Global Compact (UNGC). We are committed to the initiative and its ten principles, which align with our culture of doing the right thing.

Our website’s sustainability section also sets out our commitment to achieving the United Nations’ Sustainable Development Goals through our operations, the services we deliver to our customers and in partnership with others.

Global ambitions and goals are important, but so too are our ambitions for our local and regional communities. As such, we have played a key role in the UK Northern Powerhouse Partnership, initiatives such as POWERful Women and a comprehensive programme of stakeholder engagement.

“Sustainability, in its broadest sense, must be at the very core of what we do”

Finally, I do not believe any organisation, however well intentioned, can get its commitment to sustainability perfect on its own and I am very keen for Drax to learn from people reading our website’s sustainability section. It sets out what we see as our achievements and aspects in which we believe we need to do better. I would like to invite any stakeholder with an interest to comment on what we’re doing and help us improve where we can. Feedback can be submitted at Contact us or via our Twitter account or Facebook page.

Read the Chief Executive’s Review in the Drax Group plc annual report and accounts

The sustainable development goals

Sustainable business

In 2015, the United Nations launched 17 Sustainable Development Goals (SDGs) to end poverty, protect the planet and ensure prosperity for all by 2030. At Drax, improved performance has guided our business purpose for over four decades. We are committed to play our part in achieving the UN SDGs through our operations, the services we deliver to our customers and in partnership with others.

Drax Group has the most significant impact on the Global Goals listed below:

Affordable and clean energy

We provide 6% of the UK’s electricity and play a vital role in helping change the way energy is generated, supplied and used as the UK moves to a low-carbon future. In 2017, 65% of the electricity we produced came from biomass, rather than coal. Our B2B Energy Supply businesses encourage customers to be more sustainable, including through the provision of reliable, renewable electricity at no premium compared to fossil fuel-generated electricity.

Customers

Low Carbon

Decent work and economic growth

We directly employ over 2,500 people in the United Kingdom and United States and their health, safety and wellbeing remains our highest priority. Our B2B Energy Supply business offers energy solutions and value-added services to industrial, corporate and small business customers across the UK.

Society

Industry, innovation and infrastructure

We develop innovative energy solutions to enable the flexible generation and lower-carbon energy supply needed for a low-carbon future. We also innovate to improve the efficiency of our operations and increase our production capacity, notably in our biomass supply chain. Our B2B Energy Supply business offers “intelligent sustainability” and innovative products and services to our customers.

Customers

Low Carbon

Climate action

Our electricity generation activities are a source of carbon emissions. We are committed to helping a low-carbon future by moving away from coal and towards renewable and cleaner fuels, including biomass electricity generation and our planned rapid-response gas plants. We also help our business customers to be more sustainable through the supply of renewable electricity.

Low Carbon

Life on land

We source sustainable biomass for our electricity generation activities and engage proactively with our supply chain to ensure that the forests we source from are responsibly managed. We work closely with our suppliers and through tough screening and audits ensure that we never cause deforestation, forest decline or source from areas officially protected from forestry activities or where endangered species may be harmed.

Low Carbon

Sourcing

Environment

Partnerships for the goals

We engage with stakeholders regularly and build relationships with partners to raise our standards and maximise what can be achieved. Our collaborations align closely with our business, purpose and strategy.

Stakeholder Engagement

Society

Commitment to the UNGC

Sustainable business

In 2017, we initiated a process which will allow us to participate in the United Nations Global Compact (UNGC) a global sustainability initiative and we will evidence progress next year. We made progress in preparing for participation outlined in the following sections:

Human rights

We seek to safeguard fundamental human rights for our employees, contractors and anyone that is affected by our business. We ensure that our suppliers apply high standards to protect human rights.

Modern Slavery Statement

Labour

We have policies and standards in place to safeguard our employees and contractors. We respect our employees’ rights in areas such as freedom of association and collective bargaining and we do not tolerate forced, compulsory or child labour. We are committed to providing a safe and healthy workplace for all our people and we strive to prevent discrimination and promote diversity in our workforce.

People

Environment

As a generator and supplier of electricity, we take our responsibility to protect the environment very seriously. We have transformed our generation business and are seeking to further reduce our environmental impact. We focus on reducing our emissions to air, discharges to water, disposal of waste, and on protecting biodiversity and using natural resources responsibly. We have invested heavily in lower-carbon technology as we continue to transition away from coal to renewable and lower-carbon fuels.

Customers

Low Carbon

Environment

Anti-corruption

We do not tolerate any forms of bribery, corruption or improper business conduct. Our “Doing the Right Thing” framework sets out the ethical principles our people must uphold, which is supported by the Group corporate crime policy. Our strict ethical business principles apply to all employees and contractors and we expect the same high standards from anyone we do business with.

Ethics and Integrity

Customer service excellence

Sustainable business

Our B2B Energy Supply business offers personal account management to our large corporate customers and our employees strive to support customers at every step. We aim to treat customers fairly at all times and commit to being professional, honest and transparent in our interactions.

Both Haven Power and Opus Energy have strict standards, outlined publicly in their respective “treating customers fairly” policies. The statements explain how we communicate with customers, transfer their supply, deal with billing and payment and how we handle complaints. Opus Energy publishes an additional performance standard confirming its commitment to customers. Employees receive regular training on providing a high level of customer service.

When things do go wrong, we are quick to make amends and resolve issues efficiently. We have publicly available complaints procedures and make it clear who to contact. At Opus Energy, complaints are overseen by the Customer Experience Board.

We are proud of the recognition both Haven Power and Opus Energy received for their dedication to customer service in 2017. Haven Power was shortlisted for “Supplier of the Year” at the Energy Awards 2017 and named the UK’s best performing energy supplier by Third Party Intermediaries (TPIs) in this year’s Cornwall Insight Report. Opus Energy won “Utilities Provider of the Year” at the British Small Business Awards 2017 and was shortlisted in the National Business Awards 2017.

Protecting customer security and privacy

We take the privacy and security of our customers’ data seriously. We are committed to maintaining effective and sustainable privacy and security programmes dedicated to ensuring our customers have confidence in our data handling practices.

As part of our commitment in this area, we appointed a Group Data Protection Officer to enhance our privacy compliance. We are in the process of updating our Privacy Compliance Programme to take account of new requirements of the General Data Protection Regulation (GDPR), enforceable in May 2018, and other associated new data protection legislation.

To support our privacy compliance process and organisation policies, we undertook an extensive technical Security Improvement Programme. We implemented industry-leading control measures to protect our customer and employee data by detecting and preventing threats and security breaches.

Programme initiatives included information protection, using protection technology to automatically detect personally identifiable information and protect it from unauthorised access and disclosure. In addition, advanced threat monitoring and analytics measures implemented mean we have layered toolsets designed to detect, identify, respond to and resolve cyber threats and attacks before they can happen.

Providing customers with great value and good ethics

Founded in 1860, Salisbury Museum is located in a Grade I listed building opposite Salisbury Cathedral. As a charitable, not-for-profit organisation, the museum relies on entry fees, grants, donations and the support of its members to continue its vital work. Finding a business energy supplier that offered the best prices on the market, as well as the right length of contract and good ethics, was important for the museum.

SMEs are a key part of Opus Energy’s business and they know that a business energy service that is as smooth and efficient as possible is a top priority.

Nicola Kilgour-Croft, Finance Manager at Salisbury Museum, commented:

“The switching process went through really smoothly, and the facility to receive invoices via email means I don’t need to spend time on the phone trying to sort out payment. Having 12-month contracts really works for us.

“We were looking for a business energy supplier that offered great value, combined with the right length of contract and good ethics – and Opus Energy ticked all these boxes for us.”

How much does it cost to charge my iPhone?

4 April 2017

Electrification

It’s difficult to imagine life without electricity. Its ubiquity means it’s easy to forget the incredible feats of science, engineering, and infrastructure that allow us to undertake a task as simple as plugging in our smartphones.

In fact, so expansive are the nationwide infrastructure networks that lie beyond the wall socket, keeping a top-of-the-range mobile phone charged for a year can cost as much as… 67p.

To work out how much electricity an appliance uses there’s a relatively straightforward equation we can follow of power (kilowatt, kW) x time (hours used) = energy transferred (kilowatt-hour, kWh). To then work out how much that costs in real terms we need to take the wattage of the appliance (worked out in kilowatts as this is the metric electricity tariffs are measured in), multiply that by the number of hours it is being used for, then multiply that figure (kWh) by your energy tariff (£).

In the case of an iPhone, it works out like this: a typical iPhone charger is 5W (0.005 kW) and a full charge from empty takes a maximum of three hours (a conservative estimate). The average electricity tariff in the UK is 15p per kWh, which leads to an equation that looks like this:

0.005 x 3 x 0.15 = £0.00225 a day

And if we assume that an iPhone owner might fully charge their phone roughly 300 times a year, the total annual sum amounts to a princely 67.5p.

There’s no other way of looking at this – it’s a very low number. But it’s important to think about this number in scale. Extrapolate it across the number of devices in the country and it grows significantly.

A 2016 study on UK smartphone owners suggests three quarters of all adults have smartphones, which would put the country total somewhere in the region of 40 million. Per day, that’s 600 MWh of electricity needed to power their smartphones. That’s the equivalent of 200 MW of power generation, or enough to power 565,000 households, for one hour.

How much electricity do my other appliances use?

Unfortunately, not all appliances are as modern, efficient and cost effective as your average smartphone. In fact, when it comes to household appliances, charging your Apple iPhone, Samsung, Sony or Windows Phone device is one of the least power-hungry activities you can undertake.

A bigger offender is your fridge-freezer, but not because they need a lot of electricity to run. Instead, it comes down to the fact it is plugged in and drawing power for a significant amount of time. A fridge freezer is plugged in for 24 hours a day, seven days a week, and even though modern fridge freezers have good energy efficiency mechanisms to limit their usage, they can very easily use 427 kWh a year, leading to an annual cost of over £50.

To put that into perspective, here’s how much your other household items cost per hour according to the same equation used earlier.

What’s new?

As our homes, workplaces and industries have become more energy efficient, the country as a whole is using less power. Nowhere is this more evident than in our lighting – today, the common LED lightbulb uses just 17% of the power needed for an incandescent lightbulb of equivalent brightness.

The news has been full of stories about how much more power 4K TVs use compared to high definition TVs. But because most of us buy a TV once every decade or so, replacing your 2007 1080p full HD TV with the UK’s best-selling 4K model and watching it for an hour will actually use around 70% less power.

This continued trend towards efficiency has had a marked effect on the country’s use of power. In March 2017, the government published its latest electricity demand data for the UK, showing the country’s power needs falling all the way through to 2020.

But then something interesting happens. From 2026 the forecast shows us beginning to use increasingly more power than we are due to in 2017. To the point where by 2035, we’re using more power than we are today – 19% more. Why is this?

One possibility is electric cars. In 2015, electric vehicles (EVs) consumed 0.25 TWh of power, but that’s set to grow significantly. In its Future Energy Scenarios report published in 2016, National Grid projected EVs will consume 19 TWh in 2035, but it has already said it believes its projections might be understated. In short, the EV revolution could drive demand far higher, which leads to the question, ‘Where is all of this extra power going to come from?’.

Understanding the smart home

Our future energy needs are not just going to be met by more electricity generation capacity, they will also be assisted by something closer to home. With the introduction of smart meters, pinpointing the devices and appliances in our homes that use the most electricity will become more widespread. More than this we’ll be able to identify what time of day they’re using the most energy and when we might be able to turn them off. With this information we can optimise our usage and save money.

And while cutting down your yearly phone charging budget from 67p to 50p might not sound like much, if three quarters of the country are joining you, those pennies can quickly add up.

Retooling for a post-coal future

Dorothy Thompson, (2005-2017 Chief Executive, Drax Group)

6 December 2016

Opinion

The energy system in Great Britain is dramatically changing. Where it was once an industry dominated by coal, a predictable but dirty fuel, now our power increasingly comes from renewables. This is a trend that will continue, forcing more coal off the system.

Drax has a role in this new future of renewable power. We have already converted half of our power station in North Yorkshire to run on renewable biomass, and now, to support the needs of a system increasingly dominated by intermittent renewables like solar and wind, we are developing plans to build four new state-of-the-art flexible power stations – two in England and two in Wales.

Each will be 299 MW in size and powered by gas. Two of them could be producing electricity by 2020. It’s the next step for us in helping change the way energy is generated for a better future.

Supporting a renewable energy mix

Wind and solar accounted for 15% of Britain’s electricity mix between July and September from an installed capacity that has increased six fold in just six years. Biomass generation at Drax rose from almost nothing to producing 20% the country’s renewable power in the first half of this year. Renewable energy has come on leaps and bounds this decade – perhaps more than anyone ever thought it would.

But as well as being much lower in carbon emissions, renewables like wind and solar operate very differently to the fuels the GB Grid was built on – they’re intermittent. They only work when the sun is shining and the wind is blowing. So when it suddenly becomes still or dark, we need alternatives that plug the gap, deliver power and boost security of supply.

Biomass is one part of how we can do this using lower carbon fuels. Compressed wood pellets (the biomass used at Drax) is a renewable fuel that can be used to generate baseload power that can also be dialled up and down to meet demand. Like coal, it can also provide the ancillary services the Grid needs to stay stable.

Unlike combined cycle gas turbine (CCGT) power plants, which currently supply roughly 40% of the UK’s power and take 1.5 hours to start up from cold, our new open cycle gas turbine (OCGT) plants are like big jet engines – generating electricity at full power in just 20 minutes from cold or 10 minutes from a warm standby. It’s an incredibly fast turnaround and it’s what the energy network needs.

And because it’s a lower carbon fuel than coal with higher flexibility it will support the UK’s decarbonisation targets – by enabling more wind and solar on the Grid. We plan to use OCGTs to plug the gaps that intermittency creates – essentially flicking the switch on and off at very short notice. We anticipate they would run for no more than 1,500 hours per year – only at times when the electricity system is under stress. Through supporting more intermittent renewables we also help to enable more coal off the system.

A better future for customers

This new future will not only mean changes for us, the generators, but for customers, too.

How energy is supplied and used is evolving, and this is something that Drax can support with the growing retail side of our business.

We’re a company with a wealth of expertise in renewable power and we can use this to help deliver electricity to business customers in a way that caters for today’s market. We’re already doing this with Haven Power, but now we’re extending this with the acquisition of Opus Energy. With this new company as part of Drax Group we will be able to grow our existing retail offering, providing more of the UK’s growing businesses and established industrial and corporates not only with electricity, but also with gas. Our retail offering will provide businesses with a route to sell the power they generate but do not need – plus expertise in how they can use energy more efficiently.

R&D

These are the first steps in a new chapter for Drax. There will be more research and development to come. In the future we’ll be looking at how we can extend our American compressed wood pellet supply business, Drax Biomass, and at the potential for power storage systems.

If we want to continue to be a truly modern energy company that delivers on our aim of changing the way energy is generated, supplied and used for a better future, we need to be able to adapt. It’s always been a part of Drax’s history and it will be a part of our future.

Tag: customers

‘3D’ to drive an energy revolution