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Demystifying Demand Side Response

Discover why DSR is a smart idea for your business

Discover what DSR is, how it works and how it can benefit your business.

The UK’s electricity system operator, National Grid, keeps the grid balanced at all times. It relies on baseload generation to provide most of the electricity we use, but also on the flexibility of its users to effectively manage changes in supply and demand, especially as the mix of electricity generation has changed so much over the years. As the UK continues to change its focus towards greener energy, large thermal generation units have fallen out of favour. The UK has retired almost all oil and coal fired generators with the last coal fired generator set to retire in 2025.

Responding to changes in generation

There’s now an undeniable preference for renewable generation, in line with the focus on reducing greenhouse emissions and meeting international commitments. The rise in innovative, distributed generation schemes means that a more flexible grid is required, one that can cope with too much or too little generation.

The National Grid faces a real challenge. How can the nation’s lights be kept on without compromising grid stability? These changes have driven the development of a more flexible, smarter electricity system and demand side response services procured by National Grid are the critical success factor in achieving these objectives.

What is demand side response (DSR)?

Demand side response (DSR) is a range of services procured by National Grid. Each service is designed and combines to mitigate risks associated with a wide range of grid events. The grid cannot store energy and so the gain or loss in energy has to be managed in real time.

Demand side response does just this. It flexes the grid in smart ways and helps to stabilise the balance by invoking different services at different times.

Frequency response is the first port of call, with attempts to address events in less than 2 seconds. If this fails to address the issue, slower reacting reserve services are invoked and brought online to stabilise grid frequency.

Flexible energy usage

Users effectively take control of their site’s energy management, identifying where they can be more flexible in energy usage, by:

  • Using energy less at peak periods of grid supply (demand peaks).

  • Using energy more during off-peak periods (demand troughs) or when there is a higher than forecast power generation, for example from renewable generation.

  • Shifting energy use to an alternative distributed energy source, such as onsite generation, or using onsite storage technology.

  • Using onsite energy assets to generate and export/sell electricity back onto the grid.

By helping smooth out the grid’s ‘peaks and troughs’, and balancing supply and demand, energy users can benefit from notable financial incentives. In recent years, DSR solutions have been enhanced to not only respond to system signals but also pricing signals. This optimises consumption as well as the economy of the ecosystem.

Demand for DSR is set to grow as the electrification of the economy continues as it’s a great way to earn additional revenue.

The benefits of DSR

The benefits of DSR are not only cost, but also reduced environmental impact, lower carbon footprint and with it an improved security of supply. By monitoring their energy assets 24/7, accessing valuable performance data, energy users can:

  • Proactively manage your consumption in peak periods, avoiding higher costs.

  • Access financial incentives for assisting the grid in maintaining balance.

  • Create revenue by connecting excess on-site generation to the markets.

  • Real-time energy asset monitoring and insights into operational performance.

  • Help support the balancing of the grid and provides the flexibility to support more intermittent renewable generation.

Using energy assets to unlock revenue

DSR gives businesses visibility of how much and when they are using energy in real-time. This can help them to establish opportunities to make financially beneficial commercial and operational changes.

How?  Reduce energy consumption in peak periods, when costs are highest: cut energy costs.

  • Equipment and processes be turned down or switched-off (refrigeration plant, ventilation systems, lighting).
  • Use onsite energy generating assets instead of grid electricity.
  • Use onsite storage technology.

When?  During associated peak demand events, such as grid Red Band (DUoS), and TNUoS and Triad, when operating costs are at their highest.
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How?  Increase energy consumption in off-peak periods, when costs are lowest: cut energy costs.

  • Operate equipment/processes during the off-peak periods, i.e. at night-time.
  • Charge-up onsite storage batteries when electricity is cheapest.

When?  During periods of low demand on the grid.
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How?  Shift the type of energy used: increased revenue.

  • Use onsite energy generation assets by participating in the short-term power market.
    • Connect/feed/sell any surplus power back to the grid, e.g. from CHP generation.
    • Operate standby/reserve generators at agreed times to export/sell power to the grid.

When?
At times of highest operating costs, but also when it’s more cost-effective to operate onsite assets.

Making DSR work

Demand side providers can help energy users to achieve an optimised level of DSR – and maximise the commercial and operational benefits that go with it. Service providers such as Centrica Business Solutions [CBS] can help energy users achieve an optimised level of DSR by matching processes to specific DSR opportunities.

Demand side providers have the experience and knowledge of system monitoring, as well as  the necessary systems and relationship with electricity system operators to access revenue streams. Using energy asset monitoring, usually done remotely, demand side providers take on the decision-making processes so that energy management effectively appears automated.

The demand side provider will alert businesses when to reduce or increase energy from the grid. This allows business to take advantage of changing situations and keep costs reduced, such as during peak demand events.

Additionally, if the grid needs more power, the demand side provider will decide if there is a financial benefit to onsite energy assets feeding any surplus power back to the grid.

Is DSR right for your business?

A flexible approach to the management of your energy usage and assets means that DSR can be included in business operations. Being able to respond rapidly when the grid requires power has recognised commercial advantages. Operational advantages come from additional resilience and the optimised management of existing energy assets, especially important if your organisation has a sustainability strategy.
 

Takeaways:

Consider DSR if you are looking to develop a future-proof energy strategy. If your energy management approach is flexible and your business can respond rapidly to energy operating changes, DSR will:

  • Improve your operational efficiency.

  • Take away a lot of the burden of energy management.

  • Make your energy work better for you.

  • Unlock value from your energy assets.

  • Make money to spend on refurbishment of assets or new equipment.

Learn more about our DSR service here or get in touch at centricabusinesssolutions@centrica.com