Demand Side Response (DSR) - latest Energy Matters shows British businesses aren’t making the most of opportunities
The fourth Energy Matters (PDF, 1.12MB) briefing of 2015, npower's bi-monthly policy update for large and medium business customers, reveals that a sizeable amount of British retailers are unaware of opportunities around demand-side-response.
Energy Matters aims to demystify new and proposed pieces of legislation to explain their impact on the bottom line of UK businesses. This month we are focusing on the upcoming transitional capacity auction.
The January 2016 transitional capacity auction could be lucrative for British businesses as it is specifically focused on the area of demand-side response (DSR) and small distribution network connected generation. This allows all companies, and not just major generators, to unlock hidden flexibility in existing equipment and earn income through providing energy at times of high national demand.
Despite this, only 46% of retailers who are eligible to take part in the auction said they would be taking part. In addition, 42% of respondents who were eligible said they didn't know, suggesting a lack of knowledge about the auction and how businesses can get involved.
Of those surveyed, only 26% used demand-side-response to manage their business energy spend, with 43% saying they did not use it even though they would like to. Most of those who are not using demand side response said it was simply because they did not know enough about it in order to make an informed decision (75%).
Wayne Mitchell, Director of Markets & Innovation for npower Business Solutions, said: "The first ever DSR capacity auction represents a landmark moment for the energy industry. So we welcome the Government's focus on creating a more varied, resilient energy network to help keep the lights on during the winter months.
However, given this strong opportunity it is disappointing that there appears to be a lack of knowledge about the capacity auction and DSR more generally. Many businesses told us they would like to take part but felt they lacked the knowledge to do so.
With many companies doing everything they can to save money, DSR presents a potential opportunity for businesses to positively impact their bottom-line. The Government and the energy industry share an equal responsibility to make sure businesses possess the information they need to take advantage of DSR in the future.
By taking part in demand-side response, firms can potentially reduce their energy costs and receive payments for any excess energy exported back into the Grid. They can also benefit from the flexibility of supply around costly periods such as winter Triads."