Demand Side Response – Flexibility in consumption balances demand

Does your peak electricity use happen at roughly the same point each day? Do you use most of your electricity around the time that everyone else does? Consider shifting your time of high usage to become smarter with your electricity consumption, saving you money at the same time.

Demand side response (DSR) pushes us to use energy intelligently. Essentially, DSR encourages customers to shift their electricity usage to off-peak times when there is not so much demand on the energy network. This helps to manage the volume of electricity needed from the grid at peak times, and also reduces the amount of surplus electricity stored during quieter periods. Holding extra pre-generated electricity throughout the day costs the UK taxpayer around £1 billion a year, so if more consumers can be encouraged to shift the majority of their energy usage to quieter times, less energy will be left spare. This not only drives down energy bills, saving consumers’ money, but it means that fewer generators will be needed to meet the extra demand at peak times.

“We can turn an industry problem into a customer opportunity ”

Often, inefficient and outdated fossil fuel generators are used to meet the UK’s surplus energy demands. This means that DSR can benefit the environment by avoiding the use of these, and instead utilising renewable generation methods to lower carbon emissions. Although the majority of electricity on the grid is not renewable, moving the UK towards DSR is a step in the right direction towards a totally renewable future. It’s all about utilising our existing resources and “turning an industry problem into a customer opportunity”.

Wholesale electricity prices are highest at peak demand times, so by shifting some of the use to other times of the day, overall electricity prices will be lower. DSR is a sign of our evolving electricity markets, where a greater importance is placed on smart use, instead of on the construction of new generators. To encourage DSR to become a widespread practice, customers receive financial incentives, and it’s been estimated that annual savings from DSR could reach £8 billion in the UK. There’s also no upfront cost for consumers so it’s even easier to participate. It may not be as convenient to do your laundry in the night, or to change your daily routine to accommodate particular energy use patterns, so consumers need something to make it worth their while. It’s a solution with multiple benefits for each party, as well as working towards the EU’s Zero Carbon 2050 goal.

So, what’s in it for you?

Not only can you save money in the short-term, but being flexible and timing your usage to off-peak periods will help you battle increasing energy prices in the future, as the overall costs of electricity generation can be decreased. DSR can also encourage you to become more energy efficient and aware of your consumption. We spoke to Lebona Vernon at KiWi Power, the UK’s leading demand response aggregator, to get his take on DSR and its benefits: “Demand Side Response is key to the future energy mix of the United Kingdom, and will allow the UK to transition to a greener, low-carbon energy future. KiWi Power has been, and continues to be, at the forefront of the energy revolution.” Mr Vernon estimates the value of DSR to National Grid to be in the region of £400 million, a number which will rise as smart energy use continues to evolve.

DSR is facilitated by smart meters, which provide information on pricing, consumption, and show which times of the day you can save energy by shifting your usage patterns. This data can also be used by the grid to predict when people are going to be using more energy, and therefore when more needs to be generated to meet demands. Smart meters are a big part of manual demand side response, where users are either contacted through a message to their smart meter or texts to their phones, and asked to change their energy use if possible. An example might be a prompt to turn down heating if the weather is warm which, in turn, saves the consumer money too. While there isn’t a domestic DSR scheme yet, the Government aims to offer every home and small business a smart meter by 2020. This will mean that DSR can be rolled out across the country, furthering the positive impact of the scheme.