An energy expert told delegates at the Labour Party conference in Liverpool that any potential gains from domestic demand side response (DSR) are “limited.”
Domestic consumers are not able to shift their demand in the same way as industrial energy users and therefore the savings on offer are relatively small.
Richard Howard, Policy Exchange Head of Energy and Environment, said that their ability to actually shift their demand is not that good as most of the time in a household when you need energy, you need energy.
He added: “There are a few things that you could shift; you could set your dishwasher to run at a different time and things like that, but you can’t set your lights to run at a different time because actually you need them to see.”
Even when domestic customers are offered time of use tariffs and do their best to play around with their energy usage “over the whole year they might save £50”.
“That’s not a level of saving a lot of households would find attractive for that amount of effort.” He said the “big opportunities” could instead be found in managing the demand of large industrial energy users.
Lucy Symons, Head of Policy at Open Energi, said that they started out in fridges, so they started making fridges demand responsive, but they were making three pounds per fridge per year which is not a business case.
Nevertheless, she said the economics had “gotten better” and that domestic demand management is still worth pursuing in the long run: “I think we can stagger this. We don’t have to take on this challenge immediately.”
Last week the Science and Technology Committee called on the government to be clearer on the benefits its hopes to secure from the smart meter rollout. The government lists 11 different objectives for the project, including saving customers’ money on energy bills.