For decades now, the task of balancing our electricity network has been supported by large businesses. Through services like Short Term Operating Reserve (STOR) and through peak avoidance, businesses have contributed to resolving any mismatch between demand and supply, supporting National Grid in avoiding potentially disruptive balancing events.
However, while demand flexibility isn’t a new concept, the ongoing transformation of our energy system is creating a new set of pressures. No longer are we dealing with a linear generator-to-consumer model built around dispatchable, fossil fuel-powered generation. Today’s generators are ‘greener’, but they are also more distributed, more intermittent and less dispatchable. At the same time, the shape, volume and variability of electricity demand is scheduled to grow, due to the wave of electric vehicles and heat pumps forecast to connect to the system over the coming years.
These factors mean balancing events will become more common, more localised and will require intervention from more participants. The Carbon Trust recently suggested that in order to operate an efficient net zero energy system by 2050, 11GW of flexible demand will be needed from commercial users, 12GW from smart assets, and 48GW from electric vehicles.
So if demand flexibility is so important to our future energy system, why aren’t more businesses being helped and encouraged to participate? While flexibility market mechanisms have evolved and the energy storage market continues to grow, consumer-based flexibility products that offer real appeal to businesses remain more elusive.
The importance of timing in reaching net zero
In a net zero system, responsible consumption isn’t just about using less energy; it’s equally about when you use it. The more consumers can synchronise their energy usage with renewable generators, the easier it will be to support a system powered by renewables alone. If we could always time our electricity usage to coincide with periods when the sun is shining or the wind is blowing, there would be considerably less requirement to store and shift generated power.
Looking forwards, the roll-out of electric transport and heating will also put networks under increased stress at specific times. For instance, a cold evening where entire neighbourhoods switch on their heat-pumps and plug in their cars would cause existing networks to fail. Dynamic management of these assets (and others) would help to avoid network stress events, mitigating the need for the expensive and time-consuming infrastructure upgrades. Put simply, smart consumption of electricity will both enable and support the transition to net zero.
Unlocking the power of technology
Demand flexibility solutions need to be accessible across our business community, allowing more organisations and smart assets to actively contribute to a more agile energy system. The evolution of technology will be the most significant factor in making this possible. New data tools, monitoring platforms, and smart metering solutions, coupled with advancements in machine learning, will make forecasting and decision making more accurate and agile, enabling scheme operators to develop more sophisticated products and services.
The ideal demand management platform should be able to learn asset behaviour under varying conditions, monitor energy markets in near-real time and respond to individually-set asset parameters, only dispatching assets when it makes sense for the asset owner or user. With technology as the enabler, a holistic approach that brings together price, network and carbon intelligence will enable us to work smarter, at a carbon level as well as a price level.
The evolving value proposition of demand flexibility
Until now, DSR schemes have been largely focused on targeting red band periods: the 7% of the year when avoidable energy costs are the most concentrated. In today’s more sophisticated energy landscape, this approach is outdated, limiting participation from businesses unable to turn down during this time. The value of red-band avoidance will also be greatly diminished once the Targeted Charging Review (TCR) takes effect. Today, demand flexibility needs to be more continuous, subtle and agile; to enable greater participation and support the system’s flexibility needs for 100% of the year. We will need to focus on ‘optimisation’ rather than ‘turning down’, and to do so at scale.
For businesses prepared to participate, there are financial advantages to be gained, from saving money to accessing new revenue streams. For instance, Bryt Energy has found that usingoptimisation solutions it is able to offset up to 20% of a company’s energy spend through subtle tweaks to consumption (within agreed limits) in line with system demand. This works by providing access to diverse flexibility markets, including DSO schemes and wholesale market participation.
Measuring decarbonisation success
While the financial incentives for demand flexibility are increasingly clear, the carbon incentive for businesses remains less so. Unlike installing a solar PV system, where businesses can easily monitor and report on their carbon savings, there is currently no mechanism for businesses to account for the benefits created through demand flexibility.
While it can be challenging to put a tangible metric on the tonnes of carbon saved through optimisation, incentives for participating and contributing to a cleaner energy system could well lead to a real acceleration in adoption.
Products for an evolving market
Given the clear system requirement, value opportunity and access to technology, the foundations to accelerate adoption of demand flexibility certainly exist. However, to date they have not been packaged in a way that has allowed a wide range of businesses to participate. At Bryt Energy we want to change this. We recognise that to truly make a difference, demand flexibility needs to be more accessible and offer more meaningful benefits back to participants. It must be simple to understand, place no additional time or resource strain on the business, and create no operational disruption. It should also be able to provide all of the commercial, environmental and reputational benefits that come with making a commitment to net zero.
We believe a better approach to energy is within our collective grasp and that, together, we can make an affordable, reliable and renewable future a reality.