Intermittent or unpredictable electricity supply contracts: Problem or Opportunity?

Published on 5th January, 2018

The supply of electricity to customers on agreed contract terms is the historic “meat and drink” of the industrial and commercial (I&C) electricity market. In addition, there is now a large and growing number of electricity generators in the UK (for example waste to energy producers) who need the services of an electricity supplier in order to export electricity to the grid.

However, there is an aspect of the I&C market which lies alongside the process of putting simple “import or export” contracts in place and which is vital to the proper functioning of electricity supply services. This is the supply of intermittent and unpredictable electricity to customers whose normal demand profile is neither intermittent nor unpredictable but whose needs are, at certain times, hard to quantify and manage.

There are, of course, also customers whose requirements are always intermittent and/or unpredictable. This is in itself a growing market due to the increase of embedded generation assets within the UK network. However, in this blog I focus only on those situations where intermittent or unpredictable supply is a temporary variation from the norm.

The need to supply intermittent and/or uncertain electrical power can arise when a new connection is established or temporary builder’s supply is needed during construction. In the long run, the facility may well be expected to have a predictable and stable electricity import profile which will eventually be covered by a standard enduring contract, but that is not the case in the short term. This is due to problems in forecasting the initial consumption profile and uncertainty about how long the construction phase will last to name but two. These issues may be particularly challenging for larger connections (typically 250kVA and above). In these circumstances, a temporary arrangement is needed which does not unduly penalise the customer but which also allows a smooth transition to an enduring contractual arrangement at the right time.

Another case concerns those customers with established facilities who would normally export electricity to the grid but who sometimes need to import electricity. This may arise due to planned or unplanned plant outages. Unplanned outages are of course by definition unpredictable in their timing and duration and additionally may give rise to intermittent on-off supplies if the fault proves difficult to rectify or the remedy needs to be tested before resuming full operations. For planned outages the beginning may well be predictable, but unforeseen problems can often arise which have much the same effect on the import profile as an unplanned outage.

In all of the above cases, from the perspective of the electricity supplier offering a “traditional” long term power supply contract, a customer’s need for temporary intermittent and unpredictable imports is an additional cost of doing business – which will increase the risk premiums incorporated into the price to cover imbalance costs etc.

From the customer’s point of view, an approach which enables the different elements of the supply to be unbundled and priced in a cost reflective manner is almost certainly going to be beneficial.

In summary, by accepting some market price uncertainty in the short term, customers needing occasional stand-by imports can have their temporary requirements supplied at market cost without any risk premiums, volume penalties or expensive ‘take or pay’ provisions. The challenge is finding those suppliers who are willing and able to offer such cost reflective options.

For new connections and temporary builder’s supply, EnDCo’s New Connection Supply Contract removes the obstacles to securing reliable imports at market cost – without the need to provide forecast consumption profiles and with no commitment beyond the point at which a stable/predictable load is reached. For on-site generators with occasional import requirements, EnDCo’s PPAs are designed to enable import costs to be covered at the lowest possible market cost without penalising contract prices for the exported power.

For further information, please email me at:

Les Abbie, CEO, EnDCo