Demand Side Response

The rapid change in how the UK generates and uses electricity has made balancing generation with demand an increasingly complex challenge. Rather than the old model of central dispatch, where a large, usually fossil-fueled power station provided generation, National Grid now has to manage a broad range of distributed generation with rapidly changing demand. Demand Side Response is an increasingly important way to support this balancing act.

Demand Side Response (DSR) is the intelligent use of energy management to support balancing the grid. This involves businesses and organisations actively increasing or decreasing their current demand in response to peaks and troughs in generation or demand.

By effective use of this technique, major spikes in demand can be met without the need for additional generation capacity. Instead, end users elsewhere reduce their demand, for example by delaying energy-intensive processes until a later point when power is more plentiful. The UK only reaches maximum demand for around 0.6% of the year, meaning that to meet it entirely using new-generation capacity implies that much of this equipment would lie dormant for the majority of the time. Standby generation capacity currently adds around £1 billion annually to end users’ energy bills.

While being an important tool for balancing supply and demand, DSR also offers opportunities for businesses to access new revenue streams. This is particularly important for intensive energy users that have the capacity to significantly increase or decrease their demand at a given time. Through either a direct contract with National Grid or through the use of an aggregator, businesses can receive a guaranteed income in return for offering vital flexibility when needed. Organisations with Behind the Meter battery storage can also access DSR revenue by providing additional supply or demand into the grid from their energy storage as required.