There is a lack of understanding in the market around the value of different demand-side response (DSR) schemes, a major aggregator has warned. Michael Phelan, CEO and co-founder, Endeco Technologies says there are “a lot of schemes and a lot of prices”, and the problem is that no one is explaining where the real value is. People are “getting locked into ‘commodity schemes’ where there is no money.”
“There is more of a balancing problem than a capacity problem, at present… This is why we are seeing low prices on the capacity and short-term markets. The main revenue streams are around frequency response – i.e. the ‘faster’ services,” he commented.
Dynamic Firm Frequency Response (DFFR) is the latest revenue opportunity for large energy users and is a continuously provided service used to manage the normal second-by-second changes on the system. It relies on complex control and fast response, and offers much higher revenues than for traditional DSR.
According to Endeco’s latest figures, an organisation can benefit from an income of around £70,000 per MW in return for its availability to meet unscheduled energy peaks on the grid, by participating in DFFR. This is much higher than the £35,000 for Non-Dynamic Frequency Response and £20,000 for STOR.
While there is greater clarity in Ireland on ‘where the value is’, the UK market needs help in understanding that the faster schemes offer the biggest returns. Phelan called on National Grid to have a role in offering some clarification to the market.