Get ready for the DSR evolution

Businesses will play a key role in balancing grid demand in the coming years by providing demand flexibility. But they need the consumer-focused products to be able to participate, says Chris Curry

As we continue to transition to a low-carbon energy system, responsible consumption requires more than simply using less energy; businesses’ timeof use, and the way in which they will operate as citizens of a net zero system, are becoming equally important.

With a wave of heat pumps and electric vehicles expected to connect to the system over the coming years, electricity demand is set to rise rapidly. And as we come to rely more heavily on intermittent renewable generation, it will become increasingly complex for local and national network operators to balance our energy system. Businesses will therefore play a key role in achieving a net zero system by providing demand flexibility – but not as we know it.

Businesses have been helping to balance the grid through flexibility services such as STOR (Short Term Operating Reserve) and peak avoidance for decades, but as our energy system transforms, these services are becoming outdated.  Against a backdrop of rising demand and a more complex generation pattern, demand flexibility must be available to a far greater number of businesses (rather than simply those that can turn down at short notice) if it is to provide a reliable means of balancing the energy system and ensuring that system is affordable.

With businesses already facing challenges around how to evolve their energy operations to meet sustainability targets, an improvement in demand flexibility solutions is required. The market must deliver solutions that are designed with business needs at their core, delivering broad appeal. They must be consumer-focused, simple to manage, hold proven sustainability credentials and provide a financial advantage. In short, they must evolve to serve consumers at the same time as rewarding them for supporting a net zero system.

The Carbon Trust recently predicted that in order to operate an efficient net zero energy system by 2050, 11GW of flexible demand must be found from commercial users. The benefits of increasing the level of uptake are clear. First, if consumers can synchronise their consumption with renewable generators, our electricity system will be better able to adopt higher levels of renewable generation. Second, an ability to optimise their demand will help to reduce the anticipated increase in stress on networks (from electric heat and transportation) and minimise the need for expensive network infrastructure upgrades.

Despite the clear importance of demand flexibility, the ongoing evolution of flexibility market mechanisms, and growth in other flexibility technologies (such as large batteries), the consumer products currently offered in this area are lagging behind. If we’re going to encourage uptake among a wider community of businesses and reach the 11GW of flexible demand required, we need more focus to go into developing consumer products with real appeal. This means creating products that are more consumer-centric, that work around business needs, and that aid them through the energy transition.

Existing flexibility services may deliver an additional revenue stream for businesses, but this can be limited, both in terms of the return and – more importantly – in terms of the number of businesses able to participate. With many DSR schemes largely focused on red band periods, when demand is highest, they are only open to the relatively few businesses able to turn down their consumption during these limited periods. In any case, such services are focused on the needs of the system, as opposed to placing the consumer at the heart of the solution.

Today, the technology exists to develop solutions which can both help our energy system and provide benefits to a wider range of businesses. By combining the wealth of data collected through building management systems, monitoring platforms and smart metering solutions, understand, forecast and visualise building and asset behaviour under varying conditions. This data enables Energy Managers to make smart, accurate, business-focused decisions about how to optimise their business assets against live price and carbon data.

Putting this technological infrastructure in place and having access to the right data and modelling capability also makes it easier for businesses to transition their operations by adopting smart-ready devices such as electric vehicles, heat pumps, and batteries. It enables organisations to build clear business cases for those assets and defines a clearer path to net zero operations.

These solutions bring together operational, price, network and carbon intelligence to enable energy professionals and building managers to work smarter, and to further demonstrate to stakeholders the value that they are bringing to their organisation.

With the technology and data that’s available to us today, there’s no reason why demand flexibility services shouldn’t evolve to meet business needs as well as the needs of the system. We know that many businesses are striving to practise good grid citizenship, and we have the power to make it easier for them to do so. By working together, we can take a more efficient, affordable and practical route to net zero.

• Chris Curry is head of flexibility, Bryt Energy