Businesses can bridge electricity capacity gap by 2020

Independent access to the wholesale market and the balancing mechanism for demand-side response would help businesses bridge the electricity capacity gap by 2020.

Equal contract lengths in the capacity market with new power plants and simplified user-friendly balancing services would also enable businesses to utilise DSR to provide up to 9.8GW by flexing their demand and utilising onsite generation.

The Association for Decentralised Energy (ADE) made the recommendations in a new report highlighting the potential for DSR to help keep the lights on in the UK, while saving consumers £2.3 billion by 2035 by preventing “wasteful” construction of more than 1,300 diesel engines.

The reduction in demand on electricity networks would lower networks costs by £8.1 billion by 2030.

ADE said the UK’s DSR potential includes 2.8GW from industrial demand flexibility, 1.7GW from commercial and public sector demand flexibility, 2.3GW from combined heat and power capacity and 3GW from on-site back-up generation.

ADE director Tim Rotheray said: “If we are to meet [keeping the lights on] successfully, we need to access the enormous resource that energy users can provide, whether they are NHS hospitals, pharmaceutical manufacturers or your local retail store.

“Unfortunately, we too often miss the true size of this potential, and design our systems to meet the needs of an older, less flexible, and more centralised energy system. By making these changes to the balancing market, the capacity market and balancing services, we will allow businesses to compete fairly and help deliver the UK’s demand-side response potential.”

National Grid’s head of commercial, electricity Cathy McClay said: “National Grid is actively working on how we as an electricity industry can enable increased participation of a range of flexibility sources in our markets. We believe that there are great opportunities for consumers of energy to play an active role in flexibility and realise benefits of doing so.

“National Grid welcomes the report and is committed through Power Responsive to continue to focus on actions to help unlock the potential volumes of demand-side response”.

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BDC 309 : Oct 2023