Heating Demand Side Response

I have just joined a webcast entitled “How secure is Great Britain’s Electricity and Gas Supply Over the Next Decade”, the 2012 annual lecture to the Chartered Institution of Building Services Engineers (CIBSE), given by Alistair Buchanan CBE, Chief Executive of the Office of the Gas and Electricity Markets (Ofgem), the UK’s gas and electricity regulator. It will shortly be archived for review online :-

The speaker said a number of interesting and valuable things, and the questions and answers at the end were very perceptive. What struck me was the huge potential there is for Demand Side Response (DSR) in balancing energy supply with load, over short periods, such as during “peak” power demand at around 17:00 (5pm) each day. Whilst the UK Government think that DSR is going to be mostly in the area of power – aggregating consumers who are willing to shift their electricity usage or forego it at critical times, I think this evening’s lecture convinces me that the big win is going to be in reducing heating demand as a collective response.

What Alistair Buchanan drew out was a fairly compelling narrative. With the stresses on the UK’s energy system, there is likely to be an increased reliance on power generation from the burning of Natural Gas, whilst competition for gas within the European Union is growing stronger, and suppliers of gas to the EU are becoming riskier. To my mind, the “generation gap” looks worryingly much closer than most people keep saying – it looks like there could be zero spare capacity in the electricity grids by around 2015 / 2016.

It’s more important to keep the lights on than keep meeting residential and office building gas demand for space heating – in fact, if the power goes out, virtually nobody will be able to use their gas heating systems. But if the power is kept on, people are going to use their gas heating systems, which will then risk the lights going out – in the event of low gas stocks and supplies, because so much power is made from gas.

Space heating is overwhelmingly the biggest user of energy in most buidlings. The best solution is “demand destruction”, permanently removing demand for Natural Gas heating by mass insulation of properties, and corporate and public buildings. However, in the middle of a dark and cold winter’s evening, if gas stores are running low, and there is strong demand for gas across Europe, then short-term reductions in gas use, arranged with millions of customers, could in fact, keep everybody’s lights on.

Some message would be sent, and people would know to turn down their central building thermostats by 5 degrees C. Elegantly simple. But who is going to organise this sort of gas demand response ? And how much could people be paid for it ? We already know that electricity demand side response payments are going to amount to less than around £100 a year, and this has to be compared against utility bills that could reach £1,000 or more. But heating demand side response could be so significant, it could be much more valuable.

I can think of a number of people who would be prepared to put on extra woollen jumpers and spend their evening down at the public house rather than turn the Gas Central Heating on. For around 5 evenings a year. If they’re going to receive a £250 electronic transfer each Winter. Or money off their gas bill.

Let’s hope both power and gas Demand Side Response makes it into the UK Government’s up-and-coming Energy Bill. It would make a lot of sense.