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Influencing and controlling the timing of demand will be a core competence of companies in the electricity value chain.
The electricity value chain is increasingly focusing on the timing of demand. Less and less about the quantity of electricity generated and sold. More about kWs and kWhs at particular times.
Demand Side Response (DSR) markets are at varying stages of development across Europe. Typically, market access and value streams are characterised by uncertainties inherent to policies and market volatility. The aggregation business has been around for more than 10 years, and everybody has asked the same question: Are aggregators profitable businesses today? Aggregators will definitely be needed at scale – but can they survive financially until it happens?
Demand side response (DSR) is moving into the limelight, after sitting in the shadows over recent years. Here at Delta-ee, we are getting more and more involved in DSR as a key research topic that our clients are asking us for help with. DSR is also rising up the agenda within National Grid, as we found out when we were invited to attend and facilitate roundtable discussions at National Grid's conference and launch of ‘Power Responsive’ in London on 18th June – a welcome and concerted effort at energising DSR in the UK. The National Grid has ambitious targets for DSR, wanting to see it meeting a much bigger chunk of the capacity that National Grid requires to avoid around £9 billion worth of investments. Today, DSR accounts for around 2GW of flexibility for the UK eletricity grid; the technical potential is estimated to be in excess of 10GW.
The drivers for National Grid’s campaign are clear. With increasing deployment of large scale renewables (wind, solar and hydro), and fossil fuel generation plants coming offline, the common solution is DSR. DSR provides a cost effective way to manage these ever pressing issues and other future challenges such as projected future growth in the electrification of heating (e.g. gas boilers to heat pumps) and transport.
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