Posted on: 26/09/2016
James Graham, Head of Direct Sales was on the panel at Energyst Media’s Demand Side Response (DSR) event in September, where consumers called for an end to sales pitches and more transparency over the logistical impacts of DSR on businesses. Here he addresses some of these concerns.
According to the Energyst Media’s new report, “almost nine in ten businesses would help National Grid balance the power system if it did not adversely affect their operations”. However many of these major energy users feel that not enough information is available in relation to the impacts on their organisation.
Questions asked at the event last Thursday included, “How are you going to tap into our supply?” and “Do we have a choice when to turn down?”, making it clear that more needs to be done to help consumers further understand how DSR really works first, before they can understand how to unlock the benefits.
DSR will work differently depending on the business itself and their aggregation partner, but to help bring it to life and remove some of the uncertainty, I will talk you through how the process would work for one of our DSR customers.
Firstly, your ability to participate and the number of sites you are able to participate with is determined with an assessment carried out on your sites, analysis of your energy consumption data and your on-site generation capabilities. This tells us how much flexibility you could potentially utilise without creating an unacceptable impact on your principle operations.
How that flexibility can be unlocked is really dependent on the business itself. Examples include: adjusting thermostat settings, changing settings in industrial freezers, heaters, and dryers, cutting back on non-essential lighting and switching all operations to back-up generation.
In relation to the requirement for an aggregator to directly control your flexibility, this isn’t necessarily a requirement, Capacity Market dispatch warnings are notified 4 hours in advance giving you sufficient time to initiate your own energy reduction plan. Having said that there is a commitment to deliver on the capacity that has been entered into the program though it is understood that that sometimes other considerations may mean that performance for a particular event may be below your level of commitment. This is where SmartestEnergy can deliver clear value as an Aggregator to ensure overall delivery for a particular program is balanced across a group of contributing customers.
With the main consequences of non-performance reduced/zero payment and the potential for reduced participation capacity if it is a regular occurrence, our DSR service offers a low risk opportunity to monetise flexibility in your operations and start to develop capabilities that may be increasingly valuable in the future.
As mentioned at this month’s event, the untimely removal of DSBR has left “a bad taste” for business confidence in other demand response schemes; but with the rising costs of peak energy and the potential for volatile energy prices ever present, starkly demonstrated this month, this is a good time to start investigating how your organisation can participate. With this winter now a closed case for capacity market participants, businesses who want to be smarter consumers will need to be ready for the 2017/18 winter rounds in January and March 2017, when the next transitional auctions are due to take place.