Text Messages and Smart Washing Machines: The Future of DSR
Three ways companies in the domestic space are innovating around DSR
Power flexibility (the ability to move your power demand in response to high or low power on the national grid) has been part of high energy users’ energy management plans for many years. Recent announcements from the National Grid (who administer flexibility systems) indicate that the landscape is changing.
The most established approach to flexibility, ‘Triads’, is coming to an end, and new ways of paying for flexibility are coming on-stream to open the market up to smaller and domestic energy users. Companies operating in the flexibility space, consumer energy retail and startups are all looking to get in on the domestic flexibility market.
There are three main approaches being trialled now (detailed below). Each of them could make waves in this market, and at the moment, any of these suppliers (or others who have not entered the market yet) could end up as market leader. Customer insight, careful proposition development and understanding the possibilities offered by partners and suppliers will determine who wins in the end…
Home Energy Management (Solar + Batteries)
A recent announcement from Centrica and Sonnen said that they have created the UK’s ‘most advanced virtual power plant’ consisting of 100 homes with batteries and solar panels in Cornwall. These batteries charge from the panels and the grid, and discharge energy back to the grid or the home, responding to changes in energy availability and pricing. Something similar has been announced by Kaluza using Sonnen batteries in Lincolnshire.
This approach of managing solar panels and home batteries to respond to grid demand is one way that demand side response (DSR) will be entering the domestic sphere, but not the only one.
Customers on Octopus Energy’s ‘Agile’ tariff received a text in December telling them they would be paid 5p per KWh they used overnight, in a simple form of DSR that is already operating on a national scale. KiWi power are currently trialling an app which does much the same in Greenwich.
Being paid to set their washing machine timer or charge their EV overnight is already a reality for some UK consumers – is this something that will become more widespread over the coming years?
Another, less complete approach which could be easier to scale that the ‘whole home’ offering is connecting DSR into heating and hot water systems. Mixergy are an Oxford University ‘cleantech spin-out’ developing smart hot water tanks that are connected to the internet, and will be able to heat water or turn off in response to energy pricing and grid demand. British Gas are planning to roll these tanks out in 2020. In the US, energy exchange operator Leap has agreed a partnership with Google Nest to bring thermostats into the demand response picture.
While a winning proposition joining up energy use, generation and storage in a cheap, easy-to-use compelling package is still some way off, it’s clear that energy players are looking to develop interesting offerings that will help leverage the opportunity in their customer base.
How White Space Strategy can help
If you’re thinking about the future of flexibility in the domestic energy market, White Space Strategy can help. Our methodologies include focus groups, workshops, surveys and expert interviews and we can run projects supporting proposition development and testing and partnership strategy.
If you’d like to discuss this with us further, we’d love to hear from you.
Senior Project Team Leader