Building on the recent development of local flexibility markets, a couple of domestic demand-side response (“DSR”) trials are underway to explore whether households can provide flexibility to local electricity networks. The trials take different approaches: WPD’s Sustain-H trial uses suppliers as intermediaries while in Seco’s FLATLINE project, Seco itself acts as an energy service provider, optimising household energy assets.

WPD launches new domestic DSR trial through suppliers

Western Power Distribution (“WPD”) has launched a new domestic demand side response trial, Sustain-H, that will see households paid to restrict their electricity usage during weekday demand peaks. The trial differs from previous domestic flexibility trials in which consumers were asked to reduce their consumption by a specified amount.

Sustain-H is WPD’s first flexibility service aimed specifically at domestic customers is already proving popular, with eight suppliers signing up to offer it to their customers: EDF, Octopus Energy, Ecotricity; Kaluza, SMS, Stemy Energy, and myenergi. Five of these will go live with the service this month, with the rest following in March 2021.

The electrification of heating and transport is increasing demand during peak hours, potentially stressing network infrastructure. The new low-carbon technologies with the greatest impact on the network are home EV charging points, battery storage (with or without co-located solar PV), and heat pumps.

When WPD calculates the maximum substation load for network planning, if assumes that when similar consumers with similar types of new technologies are grouped together, their collective consumption pattern is less than the proportional scaling of the demand profile by the number of consumers.

As constraints in the low voltage distribution network are rare, WPD is applying the highly diversified profiles used for the Extra High Voltage (“EHV”) distribution network planning as the basis to assess network benefits and as a baseline for the Sustain-H scheme. A domestic consumer without any low carbon technologies is described in network planning by the diversified demand profile shown below, as well as the diversified EV charging and heat pump demand profiles used in network planning.

WPD domestic DSR profiles

Participating customers located in Constraint Management Zones within the Midlands, South West and Wales will be asked to keep their usage at or below set levels during two four-hour windows on weekdays: 8am – 12pm and 4pm – 8pm.

WPD DSR illustration

Consumers within the scheme could expect to earn about £10 per year if their home has an electric vehicle charge point, and up to £60 per year if they have a full suite of flexible technologies, including a heat pump and battery.

The Government estimates that in 2019 households paid on average £610 for gas and £679 for electricity, with a combined energy bill of £1,289. According to Graham Campbell of SP Energy Networks speaking at a Regen webinar on network charging yesterday, domestic customers on its network pay around 30p /day in network costs, so it remains to be seen whether the levels of these incentives will be high enough to change consumer behaviours.

The chances of success would be higher if consumers agree up front to allow suppliers to control their flexible asses for them remotely, reducing the need to rely on sustained changes in behaviour.

Welsh DSR trial explores energy as a service concept

WPD is also involved in another domestic DSR scheme. In August, the first residents moved into the newbuild homes that have been designated as part of the FLATLINE project, the UK’s largest domestic DSR trial. The development, located at the Mill in Cardiff, hopes to reduce energy bills for the residents by combining demand side response and demand shifting for heat and electricity, while providing a home comfort service.

FLATLINE (“Fixed Level Affordable Tariffs Led by Intelligently Networked Energy”) is backed by the Department of Business, Energy and Industrial Strategy, and is being co-ordinated by energy services provider, Sero Group, and uses energy optimisation software developed by PassivSystems. Tirion Homes, Pobl Group, Western Power Distribution, Sonnen and Mixergy are also involved in the project, with Octopus Energy providing 100% renewable energy for the homes. Half-hourly tariffs will help residents to benefit from low energy prices.

FLATLINE trial homes

Residents will be able to use an app to control their energy preferences such as room temperature and hot water needs, and Sero will use this information along with the residents’ overall lifestyle, to forecast the energy demands for each home, and manage their energy systems flexibly.

Each home will have a number of different smart energy technologies: a 6 kW Kensa Shoebox ground source heat pump, a 5 kW Sonnen 9.43 hybrid battery storage system, and a 3.6 kW Viridian Clearline Fusion solar PV system. Each house also has provisions for a 7 kW EV charger. These technologies work alongside a series of smart controls and meters, including three Thermokon 698214 thrermostats, CO2 sensors, Sharkey heat meters, Eastron electric consumption meters and dedicated fibre broadband.

Sero will manage and optimise these energy assets in order to avoid drawing electricity from the grid during peak times, and provide grid balancing services thereby keeping energy expenses and carbon intensity to a minimum. This optimisation should be largely un-noticed by the residents.

Along with the Mill, a further 46 homes are being developed at a separate site, Parc Eirin in Tonyrefail, also in South Wales, which will bring the total number of homes involved in the trial up to 225.

Energy as a service is likely to elicit a stronger response than ToU tariffs alone

It will be interesting to see how these domestic DSR trials progress. I have long been of the opinion that energy as a service is likely to be the optimal way to deliver domestic demand-side response benefits with the heavy lifting being done not by the consumer but by a service provider. Bundling the provision of energy with the types of energy assets being used in this trial allows for maximum flexibility, and the thermal characteristics of homes mean that active space and water heating can be turned down in peak times without the residents noticing any change in temperature or comfort.

This model has, in my view, a higher chance of success than approaches that require consumers themselves to undertake their own optimisation activities. This is supported by some of the research into the field. Trials of time-of-use tariffs have so far elicited fairly small reductions in demand. Faruqui and Sergici (A. Faruqui , S. Sergici, Household response to dynamic pricing of electricity: a survey of 15 experiments, J. Regul. Econ. 38 (2010) 193–225) reviewed 15 trials, mostly using realistic three-step pricing (peak, off-peak and shoulder), which suggested reductions in peak consumption of around 3–6%, while Sæle and Grande (H. Sæle , O.S. Grande , Demand response from household customers: experiences from a pilot study in Norway, IEE Trans. Smart Grid 2 (1) (2011) 102–109) found a 4.2% reduction after a Norwegian trial.

“When even people who have elected to take part in pricing trials make such limited shifts, it is clear there are substantial barriers to behaviour change that need to be better understood if DSR of more than a few percent is to be achieved,”
– I Walker and A Hope (Householders’ readiness for demand-side response: A qualitative study of how domestic tasks might be shifted in time; Energy & Buildings 215 (2020))

Domestic DSR priority

In the FLATLINE trial, the homes are new-builds so the energy systems have been installed from new. If the trial successfully proves the concept, similar schemes could be rolled out for existing homes, where the cost of new energy assets could be amortised over the lifetime of the energy services contract, thereby avoiding the need for consumers to make large up-front investments in new assets.

A range of business models can be anticipated that take advantage of Government schemes and grants while taking into account the needs of individual consumers.

The real question is whether consumers will be willing to hand over control of their energy assets, but comfort could be drawn from suitably robust contracts which ensure that consumers have the ultimate say in when their assets are used.

If consumers are satisfied that they have overall control and are able to sacrifice some cost optimisation at their own discretion eg if their demand patterns change due to days off work, having house guests, or needing to charge their car earlier due to an ad hoc trip, or simply because they feel like changing their usual habits, then such arrangements will have a greater chance of gaining traction.

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