Demand response offers ‘positive PR’ for business energy management

The report from the Energy and Climate Intelligence Unit (ECIU) concludes that that an increased uptake of demand response – which sees energy users receive payments for shifting non-essential processes away from hours of peak demand – would help to keep the system balanced and, ultimately, cust the cost of national energy security.

Released ahead of National Grid’s Winter Outlook report later this month, the report reveals that an increased use of demand response could have reduced the cost incurred by invoking National Grid contingency measures on a day of very high demand last winter by around one-fifth.

Speaking to edie following the report’s release on Monday (10 October), ECIU’s energy analyst Jonathan Marshall insisted that incentivised measures can help businesses to save energy at low costs and provide a revenue scheme to improve competitiveness.

“Business that have a high energy use – such as heavy industry, processing or utilities – can quite easily use demand-side response.” Marshall said. “That helps prevent the use of more polluting power stations when margins get a bit tight or plants fail. Instead of firing up the dirtiest, oldest power stations, you can balance out the supply and demand by demand-side measures instead of supply-side measures.

“From a sustainability professional’s point of view, you can also do that. You can also receive an income from National Grid for taking part – which would be good for any energy manager to hear. It’s also quite good at boosting PR for the company, so some companies like [construction firm] Aggregate Industries use demand response to promote their own green credentials.”

‘Any electricity user’

The past few months have seen a number of other firms within the construction sector adopt a demand-response approach to energy management – the technology has been rolled out to 20 Saint-Gobain factories and 29 of Hanson’s quarries across the country. Marshall explained that companies from any sector could introduce the practice – in conjunction with renewable energy usage – to minimise environmental impact.

“Heavy-energy industries are often companies that have the staff and focus on reducing their energy bills,” he added. “The companies taking the advantage at the moment are the ones exposed to higher electricity bills, but it can be applied by any user of electricity.

“Demand response enables more renewables to come online. If you can balance out the variability that you get with wind and solar with demand-side rather than the supply-side, it will boost each other; so they go hand in hand.”

Marshall admitted that policy is currently preventing demand response from becoming more widespread, as his ECIU report notes. National Grid has recently been criticised for taking a “short-sighted” approach which could “undermine” business confidence in the UK energy strategy. Moreover, MPs recently called for a complete overhaul of the UK’s energy network operation.

National Grid has a 2020 target of achieving 30-50% of grid balancing from demand-side sources rather than large power stations, as a number of power stations are taken offline and intermittent generation rises

ECIU expects the National Grid’s upcoming Winter Outlook report to say that electricity supply margins this winter are “tight but manageable”. The ECIU report stated that demand response would keep the system balanced, especially during the winter months, by rescheduling the use of processes that are not time sensitive away from peakload hours.

Energy Matters

Complimenting the ECIU research, a new report released this week by npower Business Solutions (nBS) has found that there has been a significant rise in the number of retail and food and drink manufacturers offering flexible energy demand.

The Energy Matters report reveals that 82% of the businesses surveyed are taking advantage of demand response to manage their energy spending, up from just 26% of those surveyed last year.

“New technologies and business models allow businesses to take control of their energy management,” said nBS chief executive David Reed. “The food and drink industry, for example, can use refrigeration load to flex demand, with just a few small on-site additions to the infrastructure, resulting in significant savings.

As demand response continues to gain traction among sustainability professionals and energy managers alike, edie recently rounded up some of the biggest and best projects across the UK that are demonstrating the vast economic and environmental potential that this burgeoning technology has to offer. Read our top 10 here.

George Ogleby