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Demand-side response (DSR) is “really misunderstood” in the UK, the Energy and Climate Intelligence Unit has warned.
At a briefing in London, ECIU director Richard Black said the UK can “learn a lot” from the US and Germany, where DSR is made much greater use of.
“It almost seems to be regarded as a scandal that you shouldn’t have enough capacity available to make that sort of peak one minute demand that you’re going to get during the year, but if you go down that route you end up with a more expensive system,” he said.
The group pointed out that just 172MW DSR was contracted in the capacity mechanism from 2018, and only 177MW is contracted in this winter’s reserve.
Recent research from DSR developer Open Energi suggested reducing demand for electricity could help to balance the UK’s power system as much as five times faster than firing up a thermal power plant as supply margins shrink.
National Grid’s head of commercial operations Duncan Burt told Utility Week in June this year 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 has come under criticism in recent years for failing to promote demand-side by relying more heavily on supply-side options, most notably in its winter balancing reserve which in its first round for delivery last winter paid £30 million of the £32 million total to old thermal plants with the remainder paid to those willing to cut their energy use at the time of peak demand.
Former energy and climate change committee chair Tim Yeo criticised the government’s capacity market last year, saying it favoured the development of new generation over the use of demand-side response options and, following last year’s auction, new energy market entrant Tempus Energy launched a legal challenge against the capacity market, arguing that the “unlawful subsidy” offered to power generators unfairly prioritises the use of fossil fuels above demand-side options.
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