Ofgem has announced that it is conducting a survey to investigate matters relating to demand side response (DSR) in order that it can gain a greater understanding of barriers that may exist to industrial and commercial (I&C) users’ ability to provide DSR.

As the UK decarbonises, energy intensive users are being asked to consider how they can offer flexibility of electricity use at times when the system is under pressure to meet the national demand. The aim is to address the barriers that exist that can be influenced by the network or other energy sources including onsite generation from the supply side and also those that are demand led including a reduction in processes during peak times. The flexibility that I&C consumers can provide through demand side response (DSR) involves customers responding to a signal to alter or shift the amount of energy being drawn from the grid during a specified period. The user is incentivised to do so with savings on electricity costs either through direct payments or reduced bills.

Using DSR can support security of supply, contribute to sustainable development and make electricity more affordable. Many I&C customers engage in DSR via aggregators – organisations that coordinate consumers’ flexibility (demand or generation) to offer it where it is needed.

Ofgem is working to facilitate new roles for industry parties by exploring how to support more large I&C customers to participate in providing flexibility and to encourage Distribution Network Operators to take a more active role in network management and engage effectively with the system operators. Ofgem is also working to remove barriers for new business models by clarifying the role of aggregators in the market and reviewing the legal and commercial status of storage.

To date, the energy industry has typically provided flexibility on the supply side to ensure availability matches demand. Examples include electricity power stations varying the power produced and network operators installing additional cabling to manage transportation more effectively. Despite these measures, demands on the energy system are changing and continuing to rely on supply side solutions is proving expensive. Finding new ways of providing flexibility on the demand side can deliver reliable and secure supply at minimum cost.

From this survey, Ofgem is particularly keen to find out what demand side response practices are currently in operation and what barriers exist that have been experienced in putting these in place or have prevented such measures being utilised. We are formulating our response to the consultation and would welcome your feedback to incorporate into this.

To have your say, please email the compliance team at compliance@carbon2018.com or alternatively complete the contact form. To discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.

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