DSR is the future of balancing, not crisis management

 Q: What are the major milestones the Power Responsive campaign has achieved in its first year?

A: We’ve made a really good start. We wanted to make demand response ‘real’ to industrial and commercial users on a much wider basis and we’ve collected over 20 really diverse case studies on the website now.

We wanted to be opportunity led and to stress that DSR is an opportunity for businesses rather than a response to an energy problem. Through collaboration with the Major Energy Users’ Council we have created a whole document for energy managers that sets out what DSR is, what it could mean for your business, and what the new revenue streams are that you could access. We’ve just started delivering seminar programmes to support this manual and we’ve had more than 100 businesses sign up.

The other way in which we’ve taken a demonstrable step forward is in innovating for new challenges. Typically, DSR has been thought of in terms of peak demand in winter – when we’ve got to turn stuff down. Actually, if you think about the new energy system that is being created with intermittent renewable generation and solar, then demand response isn’t just about a peak winter day any more. It’s about flexibility across the full year.

I’d point to the Demand ­Turn-up product that we’ve launched and which is in operation for this summer – we’ve signed up lots of businesses, and a DNO, to turn up demand for low periods in the summer when we’ve got a lot of wind on the system or the sun’s been shining all afternoon.

Q: How did the two recent notice of insufficient system margin (NISM) events affect public and industry perceptions of DSR?

A: One of our main objectives through Power Responsive is to change the industry and the public narrative on DSR. It’s really important that we look at the opportunity and the cost efficiency of working with demand-side participants, rather than defaulting to traditional sources of flexibility – as in thermal generation.

At the time of the first NISM back in November, I think it was news because we hadn’t had one for a long time. We dispatched DSBR and automatically, demand response was linked to an energy problem… that led, unfortunately, to an old narrative in which demand side is only used when we’re really in trouble. We spent a lot of time afterwards showing that this is not about crisis management. This about opportunity and a future way of managing our network.

I think the positive coverage we have had for Demand Turn-up shows that we are changing that narrative.

Is it important that market changes to support deployment of energy storage happen hand-in-hand with development of DSR services?

Q: Do we need the DSR market and the energy storage market to develop in tandem?

A: I’m really glad you’ve asked that. The first year of Power Responsive was unashamedly DSR focused. As the year’s gone on, the cost of storage has become lower and lower and so new providers of storage have come to the market. Storage is another provider within the remit that we are looking at and we are deliberately opening the doors to a broader flexibility suite in the coming year.

We are not letting go of DSR, but our message will subtly shift so it is not ‘DSR for flexibility’ but ‘new providers for all flexibility’.

That will provide new sources of participants, which is great for consumers because it means more competition.

Q: What else will come in year two of Power Responsive?

A: Our year two focus is also on customer-led simplification of existing products and innovation of new ones. We’ll also be looking more closely, using the Network Innovation Competition and Network Innovation Allowance mechanisms, at the case for flexibility across the transmission and distribution boundary – some of that work will be informed by the trials of Demand Turn-up.

We’ll also look to increasingly embrace this opportunity with the regulator and consider how we need to regulate this new market.

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