How do we get domestic consumers in UK to time-shift demand?
- May 14, 2020 3:48 pm GMTMay 14, 2020 2:12 pm GMT
- 695 views
In UK there is little effective demand side response from the domestic sector. This is despite massive investment in smart meters, and a domestic sector that is the overwhelming cause of the peak electricity demand that occurs on winter evenings.
Currently the onus falls on industry to counterbalance domestic peak demand. The cement industry is a good example, where production has been largely shifted to off-peak times to take advantage of time-of-use tariffs, with the extra cost of paying workers for unsocial hours etc.
Getting domestic consumers to shift their consumption out of peak times has been put in the too difficult box, with OFGEM, the UK regulator, making no serious effort to motivate suppliers to do anything about it.
However, there is some good news.
About ten per cent of domestic consumers do already time-shift their consumption. These are in three broad and overlapping groups:
- Economy Seven tariff payers. They pay a lower rate for electricity between midnight and 7am. They are usually owners of night storage heaters which were mainly introduced in the 1970’s to benefit from nuclear power stations operating at night. There about 1.5 million households in this category
- Solar photovoltaic installation owners. They know that electricity is cheaper for them when the sun is shining, and many have though about other aspects of grid system efficiency. There are nearly one million in this category.
- Technically aware and environmentally conscious individuals. Many of these will fall into the first two categories, and there may be a few hundred thousand additionally.
So, out of the twenty-five to thirty million domestic household consumers, between 2.5and 3 million are already doing something about the problem.
The conventional answer is smart meters followed by time-of-use tariffs will bring the change about.
Unfortunately it isn’t happening that way, for various reasons:
- Smart meters have not been introduced in a way that lends itself to the easy introduction of time-of-use tariffs
- There is no political will to address the fuel poverty issues that could arise if peak time costs are raised, as would need to happen in an unsubsidised introduction of time-of-use tariffs
- Ironically, the extreme reliability of the UK grid means that most consumers give it little thought.
So, what is the solution?
This is an open question, so please comment on it.
Likely successful programmes may include:
- A financial signal. Evidence from other countries suggests that it is the signal rather than the size of the inducement that matters.
- A nudge awareness raising programme that includes peer pressure of some sort.
- Flexibility in the messaging to adapt to changing technical contexts, e.g. to increase demand at times of high renewable output.