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Why P272 And Demand Side Response Make Perfect Partners

P272, which alters how business energy usage is settled, and Demand Side Response (DSR), which offers payment for ‘switching off’ are changing how firms manage their energy use. To help businesses get to grips with these schemes, the P272 Hub spoke with industry experts Joe McDonald and Danny Thomas*. Their insights prove how worthy of attention the energy trends are.

What is the link between Demand Side Response and P272?

Joe McDonald: DSR is a National Grid programme now available to half hourly (HH) metered companies, whereby consumers get paid to reduce their energy usage at peak times. This is so that the Grid can balance the electricity network at times when demand is highest. P272 opens the doors for more customers to take advantage of the scheme.

Danny Thomas: Joe’s right; any organisation can take advantage of DSR if they have half hourly data, no matter what their size or energy use. This is where P272 becomes relevant; it’s a regulation which means sites in meter profile classes 5-8 will soon need to start measuring electricity use on a half hourly (HH) basis, and have a half hourly meter installed. With P272 comes extra costs, but having a half hourly meter means you can take advantage of some great financial opportunities too, such as DSR.

Can any business take part in DSR?

Joe McDonald: Traditionally, DSR was only available to larger energy users with HH settled meters. P272 means that SME’s within profile classes 05-08 can benefit from DSR by virtue of the fact they will move to HH settlement, which includes an advanced meter.

Innovative software platforms allow any HH metered energy users to participate in DSR, no matter what their size. Small firms join a ‘Virtual Power Plant’, (VPP) which pools flexible demand and distributed generation and then dispatches them to help National Grid balance supply with demand. VPPs are operated by specialist utilities, such as Limejump, who optimise revenues for customers.

You might be the largest metal manufacturer in the UK, right down to a school. But you can still get involved in DSR and saving money this way.

Danny Thomas: Plus, there are no risks or obstacles to getting onside with DSR; you will only generate revenue based on energy usage you reduce. Our customers are able to take advantage of this aggregated option even if they don’t have 3MW of flexible capacity of their own.

What are the benefits of DSR?

Joe McDonald: Revenue generation is the most obvious one; and is the main reason that people sign up to DSR – you can earn money just by switching off equipment for a short period. Limejump also provides a free online portal, which allows you to analyse your HH energy data; so ‘energy intelligence’ is another benefit. Carbon savings and good PR are other positives.

Danny Thomas: Companies will be getting a more granular level of data, giving them more opportunity to identify energy waste.

What do you think are the barriers to take up of DSR?

Joe McDonald: The biggest question I get asked is ‘what’s the catch?’, and the truth is that there isn’t one – it’s simply a case of getting paid for reducing demand at peak times. People don’t understand why National Grid would offer this – so it’s important to explain why; we are facing very real risks of blackouts, so the Grid is prepared to pay to ensure that electricity demand is balanced at peak times.

Danny Thomas: I’d agree with that, and it’s coupled with an awareness issue. DSR has traditionally only been available to larger energy users, so we need to let smaller energy users know that they can now take advantage of this scheme too, and take a positive out of P272.

What sort of money can organisations make from DSR?

Joe McDonald: A school can earn between £400 and £500 just for participating for an hour. Whilst it’s not business changing, it’s almost like a bonus payment that they can invest into the school. On a different scale completely, we have clients with huge energy use such as large manufacturers who might earn £20,000 to £30,000 for switching off for two hours.

Danny Thomas: It’s important to explain to customers that this money is really in return for minimal effort on their part – it’s a case of temporarily turning off equipment if convenient. We’ve entered into a partnership with Limejump, to offer our customers the opportunity to get involved with DSR. For us it’s about telling our clients affected by P272 that the new requirement for half hourly metering can actually create financial rewards.

*Danny Thomas is Partnerships Manager at Inenco. Joe McDonald is Business Development Manager at Limejump.