Insights / Your guide to the Demand Side Response market

Your guide to the Demand Side Response market

25th November 2021

The UK’s electricity system has changed dramatically over the past decade, with renewables increasingly contributing to the energy mix. However, one thing hasn’t changed: the need for electricity supply to always meet demand.

Matching electricity supply to demand is crucial to keeping the grid stable.

Electrical frequency is a factor of power supply that’s carefully managed to keep a country’s lights on (find out more about exactly what it is here) .Great Britain’s grid operates at a frequency of 50Hz – a deviation of more than just 0.2% can cause outages and damage grid equipment. So, when there’s a spike in electricity demand, the supply must increase to meet it.

This becomes challenging in a system increasingly dependent on intermittent renewables, like wind and solar, that are unable to generate power if weather conditions are unfavourable.

Demand side response (DSR) offers a solution to maintaining the balance by creating flexibility in demand.

Businesses can participate in the DSR markets by reducing their electricity consumption when demand is high or increasing it when supply outweighs demand. Generators can also take part by increasing supply at a moment’s notice when demand spikes.

DSR markets allow businesses to not only help the grid operate reliably but also enable them to generate revenue and reduce electricity costs across the supply chain.

Building flexibility into the grid

DSR is about flexibility; making the electricity system responsive to changes in supply and demand, and dampening spikes and troughs. This in turn helps to make electricity more affordable throughout the supply chain, as well as more resilient and flexible at times of system stress.

DSR isn’t a case of businesses and facilities shuttering operations at the sudden request of National Grid. Instead, it’s about understanding the controllability of electrical assets and optimising their performance around peaks and troughs in power demand in a way that also helps stabilise the grid.

Drax Energy Sales Manager Michael Watts points to cold storage as an electrical asset type with more flexibility than you might expect:

“Freezers need to be chilled to between -10 and -20 Degrees Celsius, and typically run at about -15 Degrees Celsius,” he explains, “If you switch off the power to those freezers for an hour the temperature only drops by a few degrees Celsius, remaining within their working parameters. This makes cold store freezing ideal for optimisation services, and there are many other assets which have similar capabilities.”

Which businesses can take part in DSR?

The most obvious beneficiaries of DSR are organisations with energy-intensive day-to-day operations, which have a significant financial incentive to avoid peak electricity costs and can have a noticeable impact on balancing supply and demand.

However, DSR markets are also open to smaller electricity consumers and generators. What’s important is the flexibility of your electrical assets – both power consuming and generating.

DSR participants must be able to shift their level of electricity demand up or down often within seconds of the grid’s request.

Meeting these requirements can depend on technology that enables organisations to automate their electrical assets to respond immediately to grid needs.

Other technologies, such as batteries, that can immediately discharge power to grid or absorb and store excess electricity, providing valuable instantaneous power inertia to the grid. Batteries, both up-stream and behind-the-meter are expected to play an important role in balancing an increasingly intermittent power system.

What DSR markets are there?

There are a range of markets which can offer revenue to power users’ meters on a half-hourly bases, if they’re able to successfully operate DSR on their site.

As the grid continues to adapt to one more heavily based on renewable sources, what’s needed is evolving, with new opportunities emerging for organisations with responsive assets.

Dynamic Containment

Dynamic Containment (DC) is a fast-acting service that delivers power after a fault has occurred. It’s designed to rapidly contain frequency within the statutory range in the event of a sudden rise in demand or generation loss.

National Grid Electricity Service Operator (ESO) aims to procure as much a 1 GW of DC to counter both surges in demand and supply. Participants in the market can supply up to 100 MW per unit with the aim of spreading them around the country.

DC is also designed to work in coordination with two other new frequency response products, which are not yet available to markets, but will soon offer new sources of revenue to DSR providers.

Dynamic Moderation and Dynamic Regulation

Dynamic Mderation (DM) aims to help the ESO keep frequency in its operational range helping when there are sudden large imbalances such as errors in wind forecasting.

Dynamic Regulation (DR), meanwhile, is a pre-fault service designed to correct continuous but small deviations in frequency at a less urgent pace or size as other DSR services.

The market for DM and DR are not yet active, but National Grid ESO will share more information about DSR services and participation at the upcoming Autumn Markets Forum.

Find out if you’re eligible to support DSR

Drax can help your organisation identify opportunity in the DSR market.

By analysing your electric machinery, equipment, and other assets, reviewing your operations and energy usage, our experts collaborate with you to understand the controllability of your assets. Once we’ve identified the opportunity, we’ll then manage your flexibility and guarantee a fixed cost saving upfront.

It’s important to remember that even when you’re established as a DSR provider, you still have ultimate control over how you use power. Balancing the grid never comes at the cost to your businesses.

Get in touch to find out if your organisation has the potential to provide grid flexibility and generate revenue from the DSR market.

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