Putting the money in DR

The key challenge facing the development of a commercial DR project in Ireland is to create a market reward for consumers who modify their electricity consumption to match available supply. There is an active wholesale, but not retail, market for electricity in Ireland. This market is bid in by the Generator Units (market name for companies that operate generation plant) on the day prior to production based on expected demand. Computer software optimises for lowest cost the various bids and publishes the run schedule.

A projected system marginal price for one day during the past week is shown above. On that day the highest price was three times the lowest price. The X axis is one day divided into 48 hour segments and the Y axis is Euros per MWh.

If retail electricity prices varied by the same amount as wholesale prices then demand would start to match supply as users availed of cheaper electricity.

The objective of DR is to get retail electricity prices to vary in real time (Smart Meters) and to give consumers the tools (Synergy Module and Synergy Service) to manage their demand to minimise price.

This week I had my first face to face meeting with the Commission for Energy Regulation (CER) and although the challenges were obvious the people I met could clearly see the benefits of implementing DR. I remain hopeful that we can find a mechanism to monetise DR on the Ireland of Ireland to make it attractive for consumers to sign up.

If real time DR is not developed in Ireland then we have no hope of achieving the targetted 30% renewables that our government is aiming for.