Residential demand response: actors, decisions, connections

17 Apr 2019

The Grid needs flexible friends

As we change from coal and gas power plants to renewable generation, electricity systems become more complex and have to perform far more functions than in the past. We lose some flexibility on the supply side and need more on the demand side, in order to keep the system functioning. This calls for more attention to demand-side issues.

Just as energy efficiency is the 'first fuel'’ for sustainable energy systems in the long term, so flexible demand becomes a priority for responding to changes in supply over short periods of time, reducing the need to invest in generating and storage capacity, and in network reinforcement.

Demand can be scheduled to fit with predictable changes in supply (often referred to as demand side management, DSM); or it can respond in real time to system conditions (demand side response, DSR). ‘Demand response’ (DR) is a convenient term to cover both.

While there are still substantial DR opportunities for industrial and commercial customers to shift, reduce or increase some demand, household electricity contributes disproportionately to demand at peak times. Domestic DR is, though, more challenging to implement than DR carried out through major consumers.

The demand-side assets (aka electric heaters and vehicles, laundry appliances and other devices) are highly distributed. They are used and (mostly) owned by members of the general public, not energy professionals; and the potential for using them for DR will depend on how householders choose the scale and timing of the energy services they want and on how able and willing they are to adjust these services in response to system needs, either in person or by agreeing to pass control to someone else.

 Until recently, the electricity system was thought of as something that existed to serve customers, whatever their demands; now, customers are starting to be asked to serve the system, operating their appliances, lights and vehicles in response to network and grid conditions. Yet most have never seen themselves as partners in system management. They are likely to be some way from becoming that newly-desirable creature, the engaged customer.

Demand response: it’s a 3-D thing

As new technologies become available, the regulatory environment changes and people adapt their ways of living and working, there are plenty of uncertainties in the likely cost and availability of demand response. So in order to understand better how DR can be encouraged, we have to be willing to go into detail – looking at where, when and how demand emerges and who is involved; to consider qualities as well as quantities. We need to understand actual DR engagement in real-world contexts, recognising how many variables are likely to be in play.

The diagram below offers a way of assessing the possibilities for demand response in a given situation. The ‘box’ represents the maximum possible demand response.

This will be the product of three dimensions: the electricity-using activities that a customer carries out (e.g. laundry and dishwashing, water heating, car charging); the technologies they use for those activities and to communicate with the electricity system; and the expectations they have for energy services – for example, do they expect to use the washing machine every evening? Are they comfortable at a range of temperatures?

Traditionally, demand response has been thought of mostly in terms of technology and economics, but this is of limited use when we think about the complex realities of home life. Some demands (water heating, car charging) are likely to be more flexible than others (cooking, entertainment), regardless of price; some people are able and willing to shift demand more than others; each person brings a different mix of skill, speed, intention and understanding to everyday activities.

© McKenna, Higginson, Grunewald and Darby, 2017. A ‘demand response space’ created by the combined impact of changes in activity, technology and service expectations.


Demand response calls for lots of well-connected actors

Credible financial offers are an important part of the DR picture, to persuade people to take part and to keep them doing so. In the UK, residential DR is still in its infancy, with only one ‘agile’ tariff (from Octopus Energy) at the time of writing, plus the familiar two-band Economy-7 type tariff, typically used by customers with night storage heating.  As electric vehicles and heat pumps become more commonplace, we can expect an increase in flexible tariffs.

But DR is not all about price response any more than it is all about technology. A recent trial of smart storage heating made domestic heaters in three EU countries available for charging according to grid and network conditions, provided they also met customers’ preferences for warmth at different times of day. Observation, surveys, interviews and focus groups demonstrated how it was not just comfort and affordable cost that gave rise to effective DR and the satisfied, knowledgeable customers who were essential in providing it.

Three more factors were needed: connectivity (reliable technical infrastructure); control (good communication between customer and devices); and care (person-to-person communication before, during and after installation, plus troubleshooting if anything went wrong). From an equity point of view, effective engagement was most important in situations where customers had fewest resources and cost, comfort and control are most problematic. The first years of smart metering rollout in Great Britain offered comparable lessons.

What does research into 3-D demand response offer for the future of DR in and around the home?

When thinking about what is needed to balance a transformed low-carbon GB electricity system at relatively low cost, it’s important to recognise that it is likely to involve millions of small scale generation, investment, storage and demand response decisions, often on short timescales.

Customers will have to make decisions themselves and/or cede some control to other actors, such as demand aggregators who will trade their flexibility for them, along with hundreds or thousands of others.  Either approach requires a degree of trust in the system and the people who operate it, allied with accountability.

Early experience has shown how it requires more than reliable technology and attractive tariffs, crucial though these are. Through more qualitative research, we are learning about the conditions that actors involved in system balancing will need to meet. It’s time to think of demand response in three dimensions and also to factor in what happens in communicating and operating it through people-to-people interactions and user-friendly controls.

If (as I’d argue) successful DR works with humans in their home lives, not against them, then we need to aim for a systems approach that fully includes people as actors in energy systems, not as actual or potential  barriers to some imagined perfect design.

Sarah Darby, Environmental Change Institute, University of Oxford