Demand Side Response – What is it and why?

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Demand Side Response – What is it and why?

Demand Side Response, or Demand Side Management, is a form of energy demand management that ultimately aims to make sure demand does not exceed supply at peak times.

This is in contrast to the more traditional technique of Supply Side Response, in which power stations increase their output at busy times.

In domestic energy terms, examples of the two different methods might include:

  • Supply Side Response: Power stations increase output at the end of a popular TV show when most households put the kettle on.
  • Demand Side Response: Tariffs like Economy 7 that charge households less for power used overnight, and so encourage them to use their heating and other utilities in these non-peak hours.

For businesses, of course, the stakes can be much higher, with financial incentives worth much more if you operate in an energy-intensive industry.

 

Why use Demand Side Response?

You might ask why businesses and even domestic energy users are being encouraged to use Demand Side Response tariffs for business energy and household supplies – and why the energy networks do not just adjust the supply as necessary.

The short answer to this is that it is more effective to combine both Demand Side Response and Supply Side Response methods so that supply and demand meet in the middle, rather than simply trying to provide as much energy as physically possible at peak times.

For businesses, DSR tariffs are a great opportunity to make substantial savings. By showing willingness to work with the energy suppliers on moderating your level of energy demand at peak times, the financial incentives you can receive in return are well worth looking into.

 

DSR as part of overall energy procurement

DSR tariffs do not have to work in isolation; they are part of a variety of ways to moderate your electricity demand, which can also reduce your reliance on fossil fuel derived electricity.

For example, you might want to prioritise DSR tariffs for your mains business energy power supply, while also incorporating green energy into your overall procurement plan for business electricity and other resources.

In this way, you can meet your environmental responsibility commitments, increase your use of renewables and decrease your demand for fossil fuels and business energy from the Grid – helping to improve your overall energy stability for the coming years, at a time when the margin between supply and demand in the UK is becoming tighter than ever.


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