The potential gains from domestic demand side response (DSR) are “limited”, an energy expert told delegates today at the Labour Party conference in Liverpool.
Domestic consumers are unable to shift their demand in the same way as industrial energy users and the savings on offer are therefore relatively small.
“Their ability to actually shift their demand and so on I think is not that great, because most of the times in a household when you need energy, you need energy,” said Policy Exchange head of energy and environment Richard Howard.
“There are a few things that you could shift; you could set your dishwasher to run at a different time and things like that, but you can’t set your lights to run at a different time because actually you need them to see.”
Even when domestic customers are offered time of use tariffs and do their best to play around with their energy usage “over the whole year they might save £50”.
“That’s not a level of saving a lot of households would find attractive for that amount of effort,” added Howard. He said the “big opportunities” could instead be found in managing the demand of large industrial energy users.
Open Energi head of policy Lucy Symons agreed: “We started out in fridges, so we started making fridges demand responsive. But we were making three pounds per fridge per year which is just not a business case.”
Nevertheless, she said the economics had “gotten better” and that domestic demand management is still worth pursuing in the long run: “I think we can stagger this. We don’t have to take on this challenge immediately.”
Last week the Science and Technology Committee called on the government to be clearer on the benefits its hopes to secure from the smart meter rollout. The government lists 11 different objectives for the project, including saving customers’ money on energy bills.