What is Demand Side Response (DSR)?

Let’s be honest, when it comes to our electricity, we’re all guilty of taking it for granted.

We rarely stop to think about what would happen if the country found itself in a position where demand exceeds supply. Whilst the chances of this happening permanently are slim, there are still certain periods of time when it becomes so great that the struggle is real.

The responsibility of preventing this from happening lies at the feet of the National Grid, but it’s a tough balancing act. To mitigate such threats, they’re encouraging large-consuming UK businesses to incorporate Demand Side Response (DSR) into their energy strategies.

But what exactly does it entail? Will it be of any benefit to your business? And is it even applicable to you?

In the following piece, we explain all.

What does Demand Side Response mean? And how does it work?

DSR is a procedure put in place to help support the National Grid in maintaining the balance of supply and demand on the UK electricity network.

In simpler terms, DSR involves businesses increasing, decreasing, or shifting their electricity use during peak demand periods.

In order to do this, businesses are encouraged to adopt one of the following practices:

  • Power down and shift workload to off-peak time zones.
  • Implement battery storage solutions and shift to stored energy so you can disconnect from the grid.
  • Utilise self-generation assets such as solar or wind power to generate energy to export (sell) back to the grid (the main practice behind the government’s Smart Export Guarantee (SEG)).

What kind of benefits can it deliver?

So, we now know why the government is keen for businesses to adapt a DSR approach, but aside from supporting the country’s electrical balance, what’s really in it for you?

A fundamental benefit is music to the ears of any business, and that comes in the form of cost savings.

The demand on the grid is reflected in the price you pay for your energy. In simple terms, if you’re consuming energy during a period when the grid is under stress, you can expect to see this reflected in your next bill. More than ever, businesses are facing an increasingly volatile national grid, where limited site capacity and rising demand are seeing large energy consumers paying way above the odds during peak times.

By shifting your energy usage to an off-peak, lower demand time zone, your business will witness a significant decrease in charges. This will predominately come from a reduction in excess import charges such as Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS).

A DSR programme is not only likely to see your overall energy bills reduce, but you can also create additional revenue streams via the National Grid balancing scheme.

Businesses who have signed up to the scheme are financially compensated for reducing their grid consumption during peak times (the National Grid will inform a business when the grid is under duress). These payments vary depending on how quick (and by how much) the business in question reduces their consumption.

To meet demand, the National Grid also pay businesses who export energy directly to the grid following a warning message. So, if you were to implement a DSR plan which incorporated self-generating onsite assets, you could not only offset inflated costs by switching to carbon energy resources, but you could also sell additional energy generated back to the grid for a tidy profit.

Aside from the obvious benefit of saving (and making) money, a competent DSR plan will also go a long way in helping you reduce your carbon footprint.

What if I operate a 24/7 business that can’t ‘power down’ during peak times?

Powering down, or altering your workload, isn’t always required as part of a DSR strategy.

Many large consumers who are unable to power down during peak times are now moving towards a battery storage solution.  This involves storing electricity during cheaper off-peak hours to enable you to disconnect from the national grid during expensive “red band” and triad periods. This can allow you to move simultaneously between battery power and the grid depending on demand levels.

Is Demand Side Response only for large consumers of energy?

Historically, DSR was only for larger businesses. But now, smaller firms are starting to get on board. If you have a generator, or some element of battery storage which you can use during peak time, you can look to implement a DSR solution into your long-term energy strategy.  The rewards won’t be on the same scale as a larger consumer, but every little counts!

I’m interested, what’s the next step?

Here’s the best bit about it.

Once you’ve established the most effective way your business can respond, experienced DSR professionals can do all the hard work for you by fully implementing the process on your behalf.

If you’re looking to formulate a plan, or simply wanting a quick chat to see how applicable it would be for your business, give us a call on 0800 130 3514, or submit your details via the form below and we’ll be in touch.

 

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Paul JohnsonGroup Financial Director

Paul Johnson is very much a home-grown talent.

He joined Great Annual Savings Group in its infancy, fresh from a youth career as a professional footballer with Hartlepool United.  He quickly established a reputation within the business and aced all required accountancy qualifications in the space of four years to become the Group’s Management Accountant.

Several successful projects later, Paul was promoted to Head of Finance.  When the former FD left GAS, he took on the mantle of the business’ most senior finance professional; boasting a string of incredible achievements all under the age of 30.

Quote:

“I have witnessed phenomenal growth at the Group over the many years I’ve worked here and I’m looking forward to guiding the Group into an exciting new chapter.”

Interesting fact:

Paul made his professional debut for Hartlepool United against Bournemouth in the Football League.  Some say Danny Ings still resides in his pocket to this day.

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