UK energy regulator investigates domestic demand side response

Ofgem has issued a call for input on how best to engage domestic consumers in demand side response (DSR) in the hopes of enabling the UK’s rising electricity consumption to better match its increasing number of intermittent renewable energy sources.

According to the regulator, domestic DSR, which entails consumers adjusting consumption in response to the needs of the energy system and being rewarded through reduced bills, is a key element in achieving Government plans to decarbonise.

New market reforms and regulations are being developed in the UK to manage the expanding domestic DSR market, underpinned by digitalisation and decentralisation, which enables better monitoring and response to grid activity.

However, for domestic DSR to work at scale, states Ofgem, it also needs large scale consumer participation. Ofgem is thus seeking input from energy sector stakeholders on how to facilitate the transition to consumers becoming flexible energy consumers.

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Marzia Zafar, deputy director of digitalisation and innovation at Ofgem, said: “domestic demand side response is about optimising the way we consume energy, so it works best for a decarbonised energy system and consumers. The key to unlocking high consumer uptake is making it both attractive and easy to participate in.”

“It is not Ofgem’s role to specify what this domestic DSR journey should look like, but it is important that it is not left to chance.”

According to Ofgem, it’s anticipated that in the UK there will be many different ways for consumers to engage with Domestic DSR both manually and via automation.

The simplest and most common method of engagement, they add, is expected to be automated DSR, whereby consumers configure smart devices with default off-peak time settings, optimising consumption against time-of-use tariffs and choosing to have a third party manage their participation in flexibility markets.

Zafar added that “as the regulator, we are seeking input from a wide range of stakeholders including those working in industry, the providers of smart home and transport assets, consumer representatives and other parties’ interested in flexibility.

“This will help build a shared vision of what the emerging domestic DSR customer journey should look like and how to make that vision a reality.”

Ofgem’s inquiry comes in as energy demand in the country continues to grow with the proliferating number of clean tech assets, such as EVs and electric heating systems, coming online and adding stress to the UK’s electricity grid.

The call for input is now open and will close on Friday 29 September 2023.