As the energy market changes, we need to be prepared for a smarter future. That’s the message from Juliet Davenport, CEO and founder of electricity supplier and generator Good Energy.
Historically, the UK’s electricity infrastructure was designed to deliver power from a series of centrally-managed power plants which distributed electricity in bulk to the end-user.
In a future with electricity coming from a variety of sources – such as local wind plants and rooftop solar units – there’s the opportunity to improve on and adapt our traditional approach. We see this ‘distributed variable generation’ growing every day, and it is inevitably leading to a more decentralised model.
To make the most of the UK’s huge renewable potential, we need to evolve towards a smarter electricity market – one where demand, as well as generation, is managed on a second-by-second basis and where the deployment of decentralised storage is encouraged.
Payments must be open to those who provide demand side response (DSR) for a couple of hundred kWs, as well as to those who may turn on and off MWs, and those who can store power at a local level. Crucial to this, the market needs to be correctly incentivised to suit the participant.
More reflective and reactive
DSR presents a significant opportunity to manage the variance in demand, particularly our winter demand peak, as well as to manage distributed renewable resources on the grid.
Short-term variance in the generation output from renewable energy facilities can mean that there is insufficient or surplus generation for the grid at a particular time. DSR in the form of large-user response and large storage can offer both the ability to retain the surplus generation and provide power when it’s needed. This creates greater flexibility from more participants and allows a better market place to support the grid to be more reflective and reactive.
At the smaller end of the market we’re looking towards a ‘smart’ future with homes and smart devices reacting to signals that assist in power quality. This might mean more players coming into the market to drive down imbalance in the costs of the system. It should give suppliers more tools to balance their risks and potentially could reduce bills for customers.
A new set of players
Both domestic and business DSR could be incentivised by the creation of new ‘profile classes’ that sit within peak hours of consumption and peak hours of renewable generation.
Prices in these blocks could reflect the purpose of the block, where prices could be higher during the peak demand block and lower during the supply excess block. This type of change could be introduced without delay, and roll out in sync with Smart Metering.
This would bring a new set of players into the market to support the long-term aim of balancing. Not only will this give the consumer a larger sense of ownership of their energy usage but it will also offer them the opportunity to reduce their bills.
One thing we know is that the energy future is set for change. And we know that the energy usage of the UK is likely to change.
Electrification and decarbonisation of heating and transport and thousands of distributed generators will create demands on the grid that we do not currently see. We have to be prepared for it. The development of demand side response is integral to the high-tech dynamic grid we will need in the future.
Be sure to have your say
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