I was asked to give a bit of insight on Delta-ee’s research into commercial demand side response (DSR) customers and the barriers and benefits that they face. After sharing some tasters, the roundtable discussions from National Grid’s conference, ‘Power Responsive’, kicked off. In my last blog I gave my key highlights and an overview of the Power Responsive launch event and conference. To follow up I wanted to share the 5 key ways to engage UK customers in DSR that came out of the roundtable discussions.
The roundtable delegates were all in agreement that the benefits for customers of being involved with DSR are financial gains - “It’s all about the bottom line”. The revenue generated from DSR is the pinnacle motivation and benefit that we have found in our research with commercial customers. “Being seen as green” and meeting CSR objectives was also discussed as a ‘nice to have’. However, one aggregator indicated that they had tried to offer carbon credits and a number of other similar schemes and found that their customers were just not interested.
5 key ways to engage customer in DSR:
The roundtable discussions focussed on the barriers to businesses, below I highlight what needs to be done to overcome these barriers.
1. “Simplicity is key” - The UK DSR market is ‘an early adopters market’, critical barriers at the moment are customer awareness and understanding of DSR. A concerted effort is needed to really energise commercial and industrial customers, in the first instance.
2. “Fix early problems, then fix awareness” – As the barrier debate continued, it became clear that there are many early problems that need addressing such as DNO connection issues for backup generators, structuring availability payments to facilitate in house procurement for DSR equipment, finding a route to shorter lead times and a hassle-free approach for customers.
3. "It’s not my day job” - the time required by customers to engage in a DSR scheme is steep and off-putting. Becoming engaged with their own facilities, making colleagues aware, locating equipment for DSR being a few examples of the effort required by customers. Reducing the lead time and effort required by customers is likely to help attract customers to DSR.
4. “Long term incentive please” - Most stakeholders around the table agreed that National Grid need to offer balancing schemes on a longer time scale, to help de-risk investments and provide more certainty given as the top two reasons. A work around would be to think about the structuring of payments, i.e. availability payments could facilitate this.
5. “More value required” – Some heavy industrial customers do not find the value from DSR engaging, given their 6 figure sum for energy bills, making any current DSR payments a drop in the ocean. The opposite can be said for the commercial customers present, who were early adopters of fast frequency response.
For more information about our work in demand response, please contact [email protected]