23 February 2017

Government has set a clear policy aim to move to a smarter and more flexible energy system. The findings of the Sunshine Tariff trial provide an insight into the scale of flexibility that might be available from domestic demand side response and where it might provide value in the system.

The ground-breaking trial looked to understand how different customers engage with a cheaper daytime tariff and how active they become in changing their consumption patterns in response to the price signal. The project aimed to resolve network capacity issues in the local area by incentivising customers to use electricity between 10am and 4pm in the summer months, which is when solar generation is at its greatest.

Watch the webinar and download the reports here.

A key finding of the trial is that time of use tariffs can produce a shift of domestic demand from evening peak to daytime. Customers with automated control technology were able to shift 13 percent of their daily demand into the 10:00-16:00 period. However, demand shifting is much smaller in those customers without automation of key loads who are relying on behaviour change alone.

Whilst a shift in demand can be achieved by some customers, the trial also found that persuading the average customer to switch to a time of use tariff and adjust consumption patterns is challenging. Currently, interest in such tariffs for domestic customers appears to be focused in the energy engaged and aware. This suggests that a price incentive alone is not enough and that education will need to accompany the introduction of time of use tariffs.

In terms of the value to the distribution networks, the evidence of the trial is that demand side response from domestic customers based on a time of use tariff is not yet a sufficiently sizable, predictable or robust response to overcome a specific local network constraint.

For domestic demand side response to become a significant provider of flexibility to the electricity networks, the learning from the Sunshine Tariff recruitment shows the importance of key market developments:

  • High penetration of smart metering and domestic half hourly settlement
  • Simpler and more efficient supplier switching
  • Increases in domestic flexible loads
  • Increases in penetration of automation technology.

More work is needed on what market design can be used to incentivise flexibility on local networks.

Author: Tamar Bourne

Contact: [email protected]