Innovative Demand Side Response (DSR) schemes must top every firm’s revenue generation checklist
Helping National Grid balance the UK’s dicey electricity capacity will be a top new business opportunity in 2016.
DSR is one way to manage the challenge. For companies that choose to participate in the new wave of DSR schemes, it brings revenue generation opportunities and leads to improved internal energy management. But the variety of DSR schemes and jargon can be confusing.
In Part One of our series of articles and explainers on DSR, we explain the basics, and outline the ways to get involved.
DEMAND SIDE RESPONSE: WHAT’S IT ALL ABOUT?
The uninitiated should consider DSR a route to more intelligent energy usage, one in which participating companies and energy suppliers work in partnership.
By agreeing to increase or decrease internal electricity consumption, at the request of the National Grid, participating businesses can save on their total energy costs and reduce their carbon footprints.
DSR AT ITS SIMPLEST
At the most basic level, little more is needed than the will to get involved. Companies can do so without affecting business operations, comfort, or product quality.
In what is known as a dispatch, the energy suppliers or aggregators will ask participating firms to turn off lighting, air conditioning, pumps, and other non-essential equipment, when national electricity demand peaks occur. Depending on the type of DSR agreement, participants may be ‘dispatched’ to turn down power just once or twice a year for a few hours, or for up to 100 hours or more per year. Logically, the more frequently dispatched programs typically offer higher payouts.
Generally, DSR will work using your business smart meter. “Consumers can sign up to special tariffs and schemes, which reward them for changing how and when they use electricity,” says Ofgem. “Smart meters and other technologies will make this easier than ever.”
THE MYRIAD PATHS TO DSR
DSR can be simple; it offers a great way for businesses to take ownership of their energy usage, and get paid to do so. In addition, DSR helps firms understand their energy use. When they do, steps to more money saving measures, like energy efficiency, become more logical.
However, DSR can also be complex. There are many ways to get involved, and because the idea is relatively new, in the UK at least, the learning curve can be steep; the volume of information baffling. There may even be legislation on DSR by late 2016.
You will need to learn the ins and outs of DSR contracting, to ensure you are being correctly charged and reimbursed. There are also many different types of DSR scheme. These vary greatly, depending on how quickly you can turn your energy use down, the scale of your plant, and the volume of any renewable backup you may have.
In Part Two of this series, we examine these more complex sides of DSR. And, in Part Three, we explain all the jargon.
Find out how our demand management expertise can add value to your business.