As the UK is at a pivotal point in laying the groundwork for its demand side response industry, it's informative and helpful to look to the US experience for useful indicators as to the way forward. Our recent Energy Storage Round Table heard some valuable contributions from specialist contributors looking at the impact of storage and DSR more generally, particularly in the PJM Interconnection. A variety of measures are contributing to enormous savings in times of highest demand, without the need to turn on high-carbon peak-shaving plant, and the lessons here have to be that a market and contract opportunity that is flexible in terms of the way in which plant and technology is deployed is the way forward.
It's easy to get too fixated on one form of potential contract, as we've seen many do with the 200MW EFR tender recently. The real power of DSR and storage in decarbonising our generation network is on a flexible, fully-integrated footing, and the policy makers at OFGEM and DECC should do well to look to the US for evidence of the power of a supported but relatively unhindered market.
America’s electric system is at a stark inflection point: coal power plants are operating at all-time lows with growing retirements, natural gas prices are at historical lows while power generation is rising, electricity sales are flattening, extreme weather events are forcing more resilient infrastructure, and plunging renewable energy prices have made low- or zero-carbon sources cost-competitive with conventional fuel sources. Rapidly reducing greenhouse gas emissions from the electricity sector is now possible without radically disrupting grid operations, costs, or reliability. But the grid will require a more substantial transformation as we rely on higher shares of variable renewable generation.