Blackout ‘fear tactics’ may overshadow DSR drive, warns Tempus

Tempus Energy has slammed critics of National Grid’s demand-side response (DSR) campaign, saying “fear tactics” over the UK’s generation capacity threaten to undermine “valuable” business opportunities.

Tempus chief executive Sara Bell told delegates of a London conference that the “bad news story about not having enough generation” when DSR is used ignores the benefits for companies and the economy.

Just over one week ago National Grid used its demand-side balancing reserve (DSBR) for the first time to shave peak demand while ramping up generation to balance the system. Companies which have signed up for a DSBR contract with National Grid agree to reduce their use of grid generation during peak demand hours if the system is under stress.

But the national press criticised the move as being anti-business and a sign of an ineffective electricity system, saying National Grid “demanded” that workers “down their tools” to prevent a blackout.

“Those customers were not forced to turn off,” Bell told the conference.

“They saw a valuable business opportunity and chose to move non-critical load to a lower price period,” she said, adding that the new approach is “crucial to the economy”.

Although some firms rely on non-interruptible power to carry out their activities many companies are able to reduce non-essential energy use, including air-conditioning and refrigeration, for short periods of time without reducing productivity, supporters of DSR argue.

“We need to unlock the possibilities for businesses and individuals” rather than using energy at peak times which is “completely unnecessary”, Bell said.

In theory the cumulative impact of reducing energy use or switching to onsite generation offers a cheaper means of balancing supply and demand than investing in costly centralised power generation assets, which would only be needed a handful of times a year.

But opposition to the increasing use of DSR is not limited to the media.

Bell said those with vested interests in centralised energy investment are resorting to “fear tactics, to “hold on” while the energy system shifts towards an increasingly decentralised model.

SP Energy Networks chief executive Frank Mitchell told delegates at Utility Week Congress last month that the full impact of battery storage technology and demand-side energy management has not been considered. Specifically he warned that DSR could lead some companies to realise that it may be more lucrative to be less productive which could lead to widespread job losses and a stifling of industry.

“We need to find affordable long-term solutions. And this won’t need a radical departure from the current policy framework,” he told the conference.

The comments were made just days after Scottish Power chief corporate officer told the Financial Times that the UK faces a crisis in power supply, with National Grid set to tell firms “switch off the energy please, because we don’t have enough”.

Anderson told the newspaper that gas generation should fill the gap between supply and demand.

This summer National Grid told Utility Week exclusively that it is preparing to revolutionise how it maintains secure supply by relying on demand-side measures for “well over 50 per cent of the time” by 2030.

In the next five years National Grid says it will work with commercial and industrial energy users to “normalise” the use of demand-side response before engaging with the domestic sector to broaden the scale of flexible demand capacity.

National Grid’s director of market operations Cordi O’Hara told Utility Week that the industry is at “an inflection point” which will require the market to turn on its head.