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Understanding Demand Side Response

As the UK continues to decarbonise its energy mix with a greater proportion of renewables, improved sustainability brings with it more inflexible generation. While wind and solar generation is plentiful and low-cost, it cannot provide base load in the same way that fossil fuel generation can: put simply, we cannot turn the sun or wind up or down to match changing levels of demand.

Currently, the UK still relies primarily on gas generation to provide base load, a reliance that has seen energy prices rocket for homes and businesses alike as the world experienced a natural gas supply crisis. However, National Grid are increasingly turning to balancing services to ease the problems of inflexible generation, which over time will reduce this over-reliance on gas. This also opens up opportunities for new revenue streams for both intensive energy users and owners of battery storage.

What is Demand Side Response?

Demand Side Response (DSR) incentivises business users to provide additional flexibility to the grid in terms of overall supply and demand. Businesses that are able to quickly reduce their demand when called upon by National Grid can access payments in return for this service. Similarly, at times when generation conditions are good, end users that have a Demand Side Response agreement in place may be called to ramp up their demand to reduce excess power in the grid.

Manufacturers and other heavy industry can sometimes achieve this through shutting down power-hungry equipment such as furnaces, or increasing production when there are high levels of supply. However, this can impact on day-to-day operations, preventing manufacturers from working at maximum efficiency. DSR typically needs to be implemented within seconds of being called upon to protect grid stability, which can also make this approach more difficult.

An alternative that works for any business, including manufacturers, is to engage with Demand Side Response through the use of battery energy storage. Rather than altering your operations to change your demand profile, a business can use a Behind-the-Meter (BtM) Battery Energy Storage System (BESS) to instantaneously feed electricity back into the grid, or to draw it out, as required.

Additional Revenue and Benefits from Demand Side Response

Demand Side Response offers new revenue streams that are crucial at a time when so many businesses are struggling to manage rapidly increasing energy costs. How much an individual business is able to earn through DSR varies depending on a number of factors, including your total consumption, ability to change your rate of consumption at short notice, and the DSR provider, often known as an aggregator, that you engage with to facilitate the DSR contract.

DSR achieved through the use of battery energy storage provides an additional source of income while also allowing your business to achieve the wider benefits of the technology. When used to provide site-wide Uninterruptible Power Supply (UPS), a BESS not only delivers substantial savings on your energy bills through greater efficiency but also provides the ability to engage with DSR services that other UPS systems do not. If your site has other green technologies installed, such as on-site generation or Electric Vehicle (EV) charging, a battery is also an important tool for getting the most efficient use out of these technologies. For example, electricity generated during the day from solar PV can be stored for use overnight, or for times when multiple EV chargers are required to prevent your site relying on expensive grid power.