Making the most of demand response in future ‘may require dedicated market operator’

Demand response in the future energy system could be provided by specialist aggregator companies, by suppliers offering enhanced services, or by a dedicated "demand response market" operator.

These were among the long-term outcomes in a discussion document produced jointly by EnergyUK, which represents energy retailers and generators, and the Energy Network Association, which represents the energy transmission and distribution grid operators.

The two groups said that in their assessment of demand response in the future they had tried to avoid “landing on solutions, and had instead considered how demand response could help reduce overall energy use, shift demand out of peak times, and provide short term response to help balance the market.

In work spanning over two years the two groups also identified barriers to smart demand response, including lack of detailed information about how customers use energy, poor market incentives and customer confusion.

Assessing likely developments such as variable tariffs, as well as the needs of the physical system, they said simple market mechanisms may not be enough to change consumer behaviour and aggregators or market intervention may be necessary. For example, there would need to be transparency so the activities of different demand-side response aggregators were balanced.

The document also asked what measures should be included in network price reviews to facilitate smart response.

EUK and the ENA said this was an evolving document and they wanted responses from all stake- holders within a few months. Full details at www.energy-uk.org.uk or www.energynetworks.org