Posted on: 01/06/2017
Speaking at Edie Live last week, Head of Marketing Mike Shirley, said the UK energy revolution is already happening now. Here he discusses how smart businesses are seeing demand response (DSR) as the next chapter of energy efficiency.
Many industry experts are saying that an energy revolution is on the horizon for the UK. But we disagree - we think it’s actually already happening and the time is now for smart businesses to get involved.
Companies well-placed for the revolution are the ones that embraced energy efficiency over the last decade, ticking off all the ‘low hanging fruit’ projects and achieving their financial and sustainability targets.
The collective efforts of all these companies has seen a massive drop in peak electricity demand - 10GW since 2006- however more must now be done to adapt to the new energy system.
The next chapter of energy efficiency is demand response or DSR, where businesses identify areas of their operations that they can turn off when the demand on the National Grid is high to reduce their impact and save on peak costs.
We are helping our customers to identify and monetise their flexibility to ensure they stay competitive in the new energy landscape.
We have found that all companies, no matter what they do, can find flexibility in their operation. One of our customers has just identified that 25% of their demand can be used for demand response activities - a full case study on this customer will be published shortly.
There are two key ancillary service areas that provide the financial incentive for DSR. They are;
1) The Capacity Services - National Grid pays customers to be available to provide capacity when the system is under stress, as part of its Electricity Market Reform (EMR)policy. EMR is intended to incentivise investment in more sustainable, low-carbon electricity capacity at the least cost for energy consumers. Customers are given 4 hours’ notice and payments are received for simply being involved.
2) Frequency Services – National Grid pays customers to help them meet their licence obligation to control frequency within agreed limits i.e. ±1% of nominal system frequency (50.00Hz). Onsite kit is required but financial benefits are higher as the automated system can respond instantly.
Both of these services are becoming even more attractive as price volatility increases due to more renewables in the mix and peak non-commodity costs continue their upward trend.
Demand response has a major part to play in the UK energy revolution and businesses that are getting involved now are future-proofing themselves against their competition.
About the author
Mike is at the forefront of SmartestEnergy's product development, particularly our renewable energy and demand response offerings. Most recently he led the development of the UK’s first certified 100% renewable electricity supply product, which is certified by the Carbon Trust and enables corporates to report zero carbon emissions.