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BASIC KNOWLEDGE - DSR The benefits of Demand Side Response

From Nigel Charig

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Demand Side Response (DSR) is an electrical power-related concept that offers potential benefits both to grid operators and medium to large scale business users. Read now what companies should consider when planning to participate in some types of DSR systems.

This article explains what DSR is, and why it is attractive. It also discusses a caveat that businesses should consider when contemplating participation in some types of DSR scheme.
This article explains what DSR is, and why it is attractive. It also discusses a caveat that businesses should consider when contemplating participation in some types of DSR scheme.
(Source: gemeinfrei / Unsplash)

The concept arises because electrical demand across a country can occasionally reach peaks far in excess of normal consumption levels. One solution could be to build extra generating capacity to accommodate such peaks – but building power stations that may only be used for a few hours a year does not make great economic sense. It would be better if major users organised their demand to reduce their load during peak periods, so the grid would not be challenged by spikes that it could not handle.

However, for this to happen, users must be incentivised to participate in a DSR scheme, and they must be aware of when peaks in demand occur.

Demand side response legislation

European legislation is in place to help companies participate in DSR schemes. According to Article 2(20) of Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity ‘demand response’ means 'the change of electricity load by final customers from their normal or current consumption patterns in response to market signals, including in response to time-variable electricity prices or incentive payments, or in response to the acceptance of the final customer's bid to sell demand reduction or increase at a price in organised markets as defined in point (4) of Article 2 of Commission Implementing Regulation (EU) No 1348/2014, whether alone or through aggregation’.

Legal framework for the demand side participation in the EU Internal Electricity Market is mainly shaped by:

  • the Network Code on Demand Connection (DCC) and
  • the Electricity Balancing Network Code (NC EB, EBGL)

Many types of DSR schemes are available – examples include grid balancing, capacity market, and peak avoidance. However, while any scheme that addresses the threat of unsustainable peaks is attractive to users and grid operators alike, DSR schemes also contribute to a wider need for more insightful grid management.

There is a steady and inevitable progression away from polluting coal-fired power generation; the UK government, for example, will ban coal-based generation from 2025. Yet coal-fired power stations, while polluting, are at least stable and predictable. They can be relied upon to deliver electricity on demand, unlike renewable resources, which are intermittent. This is highlighted as the energy market moves from major infrastructures that depend on a few large power stations to more decentralised schemes that rely more on renewable energy, and ‘embedded generation’, where consumers have their own on-site renewable energy resources.

A more complex energy market

As these factors cause the energy market to become more complex, it is imperative that the grid can be effectively managed and monitored. This requires state of the art digital technology to be implemented across all areas of the electricity system, from generation to transmission, distribution, supply and demand.

Increasing grid controllability and visibility also creates revenue generation opportunities for users with suitable resources. Feed-in tariff schemes that allow sites with solar power or wind turbine renewable energy installations to sell energy to the grid are well established; DSR schemes are now available that allow such ‘user-generators’ to hook up with aggregators who manage load connections to the grid on their behalf. The aggregators pay for the energy they collect, as they use it to support the grid and maintain its frequency.

Yet these demand-side energy resources do not have to be limited to renewable energy generators. Data centres and many other business premises have UPS installations that can be rated to hundreds of kWs or even MWs.

Normally, power flows from the grid mains supply, and into a UPS through its rectifier, whose DC output is used to charge the UPS battery and feed the critical load via the UPS inverter. If the mains fails or exceeds acceptable parameter limits, the load is switched to the UPS batteries, which supply backup power until either the mains supply is restored, a local generator starts up, or the load can be shut down safely.

UPSs as grid energy resources

However some UPS manufacturers have significantly adapted their systems by introducing bi-directional rectifiers. These can draw power from the battery set and convert it back to AC to feed into the local grid supply. During this operation, the inverter continues to support the load.

This potential for revenue generation is becoming safer and more attractive for UPS operators as lithium-ion batteries start to replace lead-acid VRLA types. Lithium-ion batteries can be recharged and made ready for use again much more quickly, while also offering many times more discharge/recharge cycles.

Irrespective of whether VRLA or lithium-ion batteries are being used, though, some risk always remains. Any discharge of battery-stored energy will require recharge and recovery time – yet the battery must always be left with enough capacity to handle power outages as normally expected. Additionally, in mission-critical data centres that have an Uptime Institute Tier Rating for resilience and redundancy levels, allowing a UPS to participate in a DSR program may compromise the facility’s tier rating certification.

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Using UPS batteries in a DSR scheme allows a demonstrably greener footprint while also generating revenue – but is the possible increase of risk to the load worth it? The answer depends on each individual site’s circumstances, particularly factors such as the reliability of the electricity mains supply, and the criticality of the load.