Demand Side Response for Dummies: What Is It and How Can It Help You?

Demand Side Response, or DSR, is an important concept in the world of energy saving. But how does it work? And what does it mean for ordinary businesses, local authorities and homes? This article will provide an easy-to-understand overview of DSR and how it can benefit anyone. 

National Grid Electricity System Operation (ESO) states that DSR “is all about intelligent energy use. Through DSR services, businesses and consumers can turn up, turn down, or shift demand in real-time.” This notion of ‘shifting demand’ is the core principle of DSR. 

At a time when demand for electricity is high, wholesale prices for that electricity are higher too. This is because the grid must use more power sources to supply everybody with the power they need. However, as a regular consumer (household or business), you don’t notice anything; you usually use electricity at a fixed rate.

Whilst renewable energy makes up a growing proportion of the energy we use, the grid’s infrastructure also includes older, unsustainable sources, such as oil, natural gas and coal. These materials are known as fossil fuels and release significant amounts of carbon dioxide into the atmosphere which, as we are all aware, creates serious implications for the health of our environment. Therefore, by keeping our electricity demands below a certain threshold, we can reduce reliance upon unsustainable energy sources.

You may wonder why we can’t simply have more power stations. The issue is that the demand for energy fluctuates. It is not cost efficient to create new sources of energy which will only be required at certain peak times. Fossil fuels are useful in keeping the grid at its optimum frequency because, unlike solar or wind energy, they can be burned on demand. Until we can power the grid entirely through renewables, these sources unfortunately make up a portion of the energy we use. As electricity consumers, the best thing we can do for energy prices and carbon emissions is to spread our energy usage over different time periods.

DSR On The Rise

DSR is different from energy efficiency because energy efficiency is a fixed quantifier for a home or business’ energy usage, whilst DSR works on the premise that energy saving is both more economically and environmentally valuable at certain times. However, DSR has become almost as integral to governmental and industrial energy-saving strategies in recent years. 

The UK’s 2019 National Energy and Climate Plan allocated “up to £7.75 million from 2018-2021 to support innovative domestic applications of Demand Side Response (DSR) technologies and business models”. The plan also noted the obligation placed on National Grid by Ofgem’s Gas Significant Code Review (SCR) to “encourage greater demand-side participation from industrial and commercial users” by allowing large gas consumers, since 2016, “to reduce the amount of gas they use during times of system stress in exchange for a payment.”

Smart meters have a big role to play in the uptake of DSR and, in March 2021, the UK’s rollout of smart-meters hit a milestone 15 million. With more customers than ever able to access and change behaviours based upon their energy usage, the principles of DSR are becoming easier to implement on a smaller scale.

Behavioural Vs. Automated DSR

DSR can be behavioural or automated. 

Gridpoint.com helpfully describes the distinction, stating that with behavioural DSR requires individuals to “participate manually by contacting their utility”, whereas automated DSR customers “can work with a partner or aggregator to automate their participation.” 

This divergence relates to the context of energy usage, with behavioural DSR most applicable for “large commercial or industrial facilities that have a substantial, flexible energy load and staff on-site”. Automated DSR can help “residential to small commercial to large buildings [with] enrollment, strategy development, event execution, and reporting.” 

Power Security

Alongside environmental and cost benefits, DSR can play a big role in reducing the grid’s risk of outages and system failures. 

The grid must maintain a balance between energy input and output, staying within a tiny frequency range of the 50 Hz equilibrium point. Too much demand and not enough available energy would result in a decrease below the minimum frequency and cause power stations to shut down for safety reasons. By participating in DSR, we can help to prevent this from happening.

Payback

The amount of money saved through DSR varies based on the amount of energy used and the patterns of change businesses can make. 

In their guide to DSR, National Grid uses the London Underground as an example, stating that as London’s biggest power consumer, the tube has achieved savings of £3 million through DSR. Flexitricity, the energy partner responsible for Britain’s first DSR portfolio, gathered £20 million in direct revenue before 2020. 

In 2021, the UK’s largest domestic trial, FLATLINE, published findings wherein 20 new, smart homes saved 25% on energy through “opening up the benefits of grid balancing payments”. As part of the project, residents used an app to “set their lifestyle and behavioural preferences, allowing the system’s software to forecast and demand-shift.” They could then evaluate their energy usage habits and adapt to changes in the grid.

With all of this in mind, it’s easy to see how intelligent use of metering, digitalised energy management and an understanding of the grid’s demand cycles can help a range of domestic, business and large scale energy consumers to cut costs. And that’s exactly where GridDuck can help.

We provide the technological means to keep track of and control energy usage second-by-second, helping you to automatically balance your appliances to match renewable energy in real time. So far, we’ve helped businesses in agriculture, hospitality, tech and more to save. 

To find out how we can help you to do the same, schedule a quick and informal chat with Miles today.